Strong Housing & Earnings Lift Stocks!
Tuesday, July 19, 2011
Stock Market Commentary:
Stocks bounced nicely off their respective 50 DMA lines after a flurry of stronger-than-expected economic and earnings data was announced. It is important to note that all the major averages are back above their respective 50 DMA lines which is an encouraging sign. Looking forward, the next level of support are the 2011 lows/the 200 DMA lines and the next level of resistance are the 2011 highs.
Housing Starts & Earnings Top Estimates!
On Tuesday, housing starts topped estimates and jumped to the fastest pace in five months. The Commerce Department said work began at an annual rate of 629,000 houses which is up +14.6% from the prior month. This was the latest in a string of stronger-than-expected data from the ailing housing market. Hopefully, better days lie ahead for the ailing housing sector. Elsewhere, several high profiled companies released stronger-than-expected Q2 results which bodes well for the current rally. IBM & Coca-Cola (KO) led the way higher when they reported solid Q2 results. Barring some unforeseen event, we are expecting another solid earnings season.
Market Outlook- Uptrend Under Pressure:
The last week of June’s strong action suggests the market is back in a confirmed rally. As our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the current rally is under severe pressure as investors patiently await earnings season and continue to digest the latest economic data. Until all the major averages violate their respective 50 DMA lines on a closing basis, the market deserves the bullish benefit of the doubt. If you are looking for specific help navigating this market, please contact us for more information.
