Stocks Remain Strong As Home Prices Continue To Fall
Tuesday, December 28, 2010
Stock Market Commentary:
The recent tight trading range continued on the major averages as stocks looked past a stronger than expected retail sales report, the latest read on consumer confidence, and the latest read on housing prices. Heretofore, market internals remain healthy evidenced by broad leadership, favorable volume patterns, a rising advance/decline line, and a healthy number of new highs on both major exchanges.
Retail Sales, Home Prices, & Consumer Confidence:
Before Tuesday’s opening bell, the ICSC-Goldman same-store sales index topped estimates. The index rose +1% and +4.8% on a year-on-year basis. The reading was the strongest since Easter which bodes well for the Q4 holiday shopping season. Elsewhere, the S&P Case-Shiller index of home prices slid -0.8% from October 2009 which was the largest year-over-year decline since December 2009. The reading fell short of the Street’s estimates which put pressure on the ailing housing recovery. At 10 AM EST, the latest read on consumer confidence was released.
Market Action- Market In Confirmed Rally Week 18
It is encouraging to see the bulls show up in November and defend the 50 DMA lines for the major averages. The market remains in a confirmed rally until those levels are breached. The tech-heavy Nasdaq composite and small-cap Russell 2000 indexes continue to lead evidenced by their shallow correction and strong recovery. However, it is important to note that stocks are a bit extended here and a pullback of some sort (back to the 50 DMA lines) would do wonders to restore the health of this bull market. Put simply, stocks are strong. Trade accordingly. If you are looking for specific high ranked ideas, please contact us for more information.
