Tuesday, July 13, 2010
Stock Market Commentary:
The major averages rallied for a sixth consecutive day after Alcoa (AA) and CSX (CSX) officially kicked off earnings season and the government said the trade deficit topped $1 trillion. Volume, a critical component of institutional sponsorship, was higher on the Nasdaq and the NYSE. There were 23 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 21 issues that appeared on the prior session. Advancers trumped decliners by over a 5-to-1 ratio on the NYSE and nearly a 5-to-1 ratio on the Nasdaq exchange. Finally, new 52-week highs outnumbered new 52-week lows on the NYSE and the Nasdaq exchange. It remains critically important for leadership (new highs) to expand if the new rally effort will prove to be a sustained market advance. If not, last Wednesday’s strong move may turn out to be the latest in a string of failed rallies confirmed with follow-through days.
Earnings & Economic Data Help Lift Stocks:
It was healthy to see the major averages rally after second quarter earnings season officially began. Only time will tell whether or not this rally will continue as a slew of companies report their results over the next few weeks. Both Alcoa and CSX reported solid results and raised their 2010 forecasts which helped allay concern that the economic recovery was in jeopardy, or that a double-dip recession may occur. Elsewhere, the Treasury Department said the federal deficit topped $1 trillion during the first nine months of this budget year. This was -7.6% lower than last year’s total of $1.09 trillion.