Stocks Rally As Greek Banks Consolidate

Byinfo@50park.com

Monday, August 29, 2011
Stock Market Commentary:

Stocks rallied on Monday as E.U. debt woes continued to ease and buyers continued accumulating shares as this extremely volatile month begins its final week. The major averages are technically in a new confirmed rally which means probing the long side may be prudent, if/when high ranked stocks begin to trigger fresh technical buy signals. Even with the latest FTD, the major averages are still trading below several key technical levels which means this rally may fade if the bears show up and quell the bulls’ efforts.

E.U. Debt Woes Ease, Housing Data Still Weak, & Stocks Extend Gains

Before Monday’s open,  European exchanges were higher after news spread that EFG Eurobank and Alphabank, two of Greece’s troubled financial institutions, merged. The consolidation was viewed as a sign of progress toward a more stable banking system for the debt-stricken nation. Economic data in the U.S. was mixed. Personal income rose last month by +0.3%, which missed the Street’s +0.4% estimate. The “good” news was that spending jumped +0.8% which easily topped the Street’s +0.5% estimate. A separate report showed pending home sales fell in June by -1.3%, which modestly beat the Street’s estimate for a decline of -1.4%. It was very encouraging to see the broad based rally, which was confirmed with last Tuesday’s FTD, get stronger.

Market Outlook- Confirmed Rally!

The major averages confirmed their latest rally attempt on Tuesday, August 23, 2011 which was the 11th day of their latest rally attempt. It is important to note that all major rallies in history began with a FTD however not every FTD leads to a new rally (i.e. several FTDs fail). In addition, it is important to note that the major averages still are under pressure as they are all trading below their longer and shorter term moving averages (50 and 200 DMA lines) and are all still negative year-to-date. Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. This rally will fail if/when August’s lows are breached. Until then, the bulls deserve the benefit of the doubt. If you are looking for specific help navigating this market, please contact us for more information.
 

Similar Posts

  • Week In Review: Stocks Fall As Greece Drama Continues

    Byinfo@50park.com

    Stocks End Week Lower As Greek Drama Continues Stocks fell hard on Monday after it became clear that Greece would default on its debt and literally shut down their entire banking system for the week. Greece missed its latest payment to the IMF and became the first developed nation to default on their debt in modern history….

  • 6th Consecutive Weekly Decline

    Byinfo@50park.com

    Market Outlook- Market In A Correction:
    From our point of view, the market is back in a correction now that all the major averages closed below their respective 50 DMA lines and important upward trendlines. Since the beginning of May, we have urged our clients and readers to be extremely cautious as the major averages and a host of commodities began selling off.
    For those of you that are interested, the S&P 500 hit a new 2011 high on May 2, 2011. Two days later, on Wednesday, May 4, 2011, we turned cautious and said “The Rally Was Under Pressure” (read here). Then on Monday, 5.23.11, we changed our outlook to “Market In A Correction” (read here). On Monday June 6, 2011 we pointed out that the S&P 500 violated its 9-month upward trendline (read here) and reiterated our cautious stance. We have received a lot of “thank you” emails for being “spot on” in our cautious approach. We are humbled by your presence and very thankful for your continued support. Looking forward, the next level of resistance for the major averages is their respective 50 DMA lines then their 2011 highs. The next level of support is their longer term 200 DMA lines. If you are looking for specific help navigating this market, please contact us for more information.
    Stock Market Research?
    Global Macro Research?
    Want To Follow Trends?
    Learn How We Can Help You!

  • Japan's Credit Cut & Durable Goods Top Estimates

    Byinfo@50park.com

    Market Outlook- New Rally Confirmed!
    The major averages confirmed their latest rally attempt on Tuesday, August 23, 2011 which was the 11th day of their latest rally attempt. This action suggests a subtle and bullish shift may be on the horizon. It is important to note that all major rallies in history began with a FTD however not every FTD leads to a new rally (i.e. several FTDs fail). In addition, it is important to note that the major averages still are under pressure as they are all trading below their longer and shorter term moving averages (50 and 200 DMA lines) and are all still negative year-to-date. Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. This rally will fail if/when August’s lows are breached. Until then, the bulls deserve the benefit of the doubt. If you are looking for specific help navigating this market, please contact us for more information.

  • Stocks Edge Higher On Stronger Than Expected Housing Market

    Byinfo@50park.com

    The fact that there has only been one distribution day since the follow-though-day (FTD) bodes well for this nascent rally. It is also a welcome sign to see the market continue to improve as investors digest the latest round of stronger than expected economic and earnings data. Remember that now that a new rally has been confirmed, the window is open to proactively be buying high quality breakouts meeting the investment system guidelines. Trade accordingly.