Stocks Rally On Healthy Retail Sales Data

Byinfo@50park.com

Thursday, April 8, 2010
Market Commentary:

The major averages rallied on Thursday after a slew of US retailers reported stronger than expected same store sales. Volume totals on the NYSE and on the Nasdaq exchange were reported lower compared to Wednesday’s totals. Breadth was positive as advancers led decliners by about a 10-to-9 ratio on the NYSE, and by a 14-to-13 ratio on the Nasdaq exchange. New 52-week highs trumped new lows on both exchanges yet again. There were 36 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, lower from the 52 issues that appeared on the prior session.  A healthy crop of new leaders making new highs bodes well for any market rally, so the recent expansion in leadership has been a welcome post-holiday improvement.  However, the rising number of distribution days has raised some concerns.

Investor’s Digest A Slew Of Economic Data: Greece Woes, Jobless Claims & Healthy Retail Sales Data:

Stocks were under pressure as concern spread that Greece’s debt crisis may intensify and spread to other European nations which may hinder the global economic recovery. However, the fears subsided after European Central Bank President Jean-Claude Trichet said he doesn’t expect Greece to default. In the US, same store sales from many of the nation’s largest retailers topped estimates which bodes well for the economy. In addition, a slew of retailers hit fresh 52-week highs which bodes well for the entire retail sector. Elsewhere, the Labor Department said initial jobless claims unexpectedly rose +18,000 to +460,000 last week.

Market Action- Confirmed Rally:

The benchmark S&P 500 Index currently has 5 distribution days while the Nasdaq Composite and Dow Jones Industrial Average have 4 since the March 1, 2010 follow-though-day (FTD). These distribution days have not been damaging, however the simple fact that we currently have 5 distribution days for the S&P 500 suggests a more cautious approach may be prudent. Trade accordingly.
Professional Money Management Services- Free Portfolio Review:
Our skilled team of portfolio managers knows how to follow the rules of this fact-based investment system. If your portfolio is greater than $100,000 and you would like a free portfolio review, Click Here to get connected with one of our portfolio managers. ** Serious inquires only, please.

Similar Posts

  • Day 2: Stocks Rally As Inflation Eases

    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!

  • Tough Week On Wall Street

    Byinfo@50park.com

    Some might say that Thursday was Day 1 of a new rally attempt due to the fact that the major averages closed in the upper half of their intra-day ranges, recovering from steep losses in the first half of the session. That still does not change the fact that the market is in a correction which emphasizes the importance of raising cash and adopting a strong defensive stance until a new follow-through day emerges. For the past several weeks, this column has steadily noted the importance of remaining very selective and disciplined because all of the major averages are still trading below their downward sloping 50-day moving average (DMA) lines. Their 50 DMA line may continue to act as stubborn resistance. It was also recently noted that a series of capital markets (Crude oil, Copper, NYSE Composite Index, among others) 50 DMA line already sliced below the 200 DMA line, an event known by market technicians as a “death cross” which usually has bearish implications. On Friday, the benchmark S&P 500 Index’s 50 DMA line offically undercut its longer term 200 DMA line which means the benchmark index can be added to the list. Trade accordingly.

  • Stocks End Near Lows As Dollar Rallies

    Byinfo@50park.com

    The fact that there has only been two distribution days 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.

Leave a Reply

Your email address will not be published. Required fields are marked *