07 Jul
Daily Market Commentary

Stocks Rally On A Slew Of Economic Data

Thursday, July 7, 2011
Stock Market Commentary:

It was encouraging to see stocks rally on Thursday as investors digested a slew of economic data from across the globe. It is also encouraging to see that all the major averages remain above their respective 50 DMA lines and are on track for a second consecutive weekly gain which suggests the bulls remain in control of this market. The next level of resistance is their respective 2011 highs.

ECB Raises Rates, German Industrial Production, Chain Store Sales, ADP Jobs Report, & Jobless Claims:

Before Thursday’s open, the European Central Bank (ECB) raised rates by 25 basis points to help curb inflation. The ECB raised rates to +1.5% which is the highest level since March 2009. Germany, Europe’s largest economy, said industrial production rose by +1.2% which topped the Street’s estimate for a gain of +0.8%. In The U.S., ADP, the country’s largest private payrolls company, said U.S. employers added +157,000 which easily topped the Street’s estimate for a gain of less than 100,000. Even though the number topped estimates it was still below the +250,000 jobs needed each month to lower the unemployment rate. Several large U.S. retailers reported stronger than expected same store sales in June which bodes well for the economic recovery. Finally, the Labor Department said weekly jobless claims fell by -14,000 to 418,000 which is still above the dreaded 400,000 mark. However, a lower reading for the week bodes well for the overall employment situation.

Market Outlook- Market In A Confirmed Uptrend:

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 action remains bullish until the major averages and leading stocks violate their respective 50 DMA lines. Until then, the market deserves the bullish benefit of the doubt. Barring some unforeseen event, investors will likely be focusing on the jobs market this week and then spend the rest of the month focusing on the latest round of economic and Q2 earnings data. If you are looking for specific help navigating this market, please contact us for more information.
 

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06 Jul
Daily Market Commentary

Stocks Look Past Chinese Rate Hike & Disappointing Economic Data

Wednesday, July 6, 2011
Stock Market Commentary:

Stocks closed higher on Wednesday after China raised rates to curb their red-hot economy and investors digested Portugal’s downgrade. It is encouraging to see that all the major averages remain above their respective 50 DMA lines which suggests the bulls remain in control of this market. The next level of resistance is their respective 2011 highs.

Chinese Rate Hike, ISM Service Index, & Healthy Market Action:

Before Wednesday’s open, China decided to raise their key interest rate by 25 basis points to curb inflation and their robust economy. Keep in mind that a slowdown in China curbs demend for so-called risk assets. Therefore, this put mild pressure on a stocks and a slew of commodities. At 10am EST, the ISM released its service index which fell short of the Street’s estimates and bodes poorly for the economic recovery. It is also important to note that the major averages are simply pulling back to consolidate last week’s strong move. A light volume pullback after a large move is normally a very healthy event. The key is to analyze the pullback and make sure the major averages and leading stocks do not violate key areas of support. So far the pullback has been very healthy and for the bulls sake, lets hope this healthy action continues.

Market Outlook- Market In A Confirmed Uptrend:

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 action remains bullish until the major averages and leading stocks violate their respective 50 DMA lines. Until then, the market deserves the bullish benefit of the doubt. Barring some unforeseen event, investors will likely be focusing on the jobs market this week and then turn their attention to Q2 earnings. If you are looking for specific help navigating this market, please contact us for more information.
 

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05 Jul
Daily Market Commentary

Stocks Quiet As Next European Domino Wobbles

Tuesday, July 5, 2011
Stock Market Commentary:
Stocks were closed on Monday in observance of the July 4th holiday. Overseas, stock markets edged higher as investors awaited Friday’s much anticipated jobs report. Stocks were quiet on Tuesday after the next European domino began to wobble. However, it is encouraging to see that all the major averages remain above their respective 50 DMA lines which suggests the bulls remain in control of this market. The next level of resistance is their respective 2011 highs.

Monday & Tuesday: Stocks Quiet As Investors Await Latest Employment Data

Stocks were quiet on Tuesday after the Commerce Department said U.S. factory goods rose +0.8% in May to $445.29 billion. The gain followed a large decline in April and bodes well for the ongoing economic recovery. The report also reiterated a series of stronger than expected economic data which suggests the economy is improving. Investors are now waiting for ADP’s number and then Friday’s official non-farm payrolls report for the latest measure from the already weak U.S. jobs market. Elsewhere, Moody’s Investors Service, a popular rating agency, downgraded Portugal’s debt to junk status which sparked fresh concerns regarding the European debt crisis.

Market Outlook- Market In A Confirmed Uptrend:

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 action remains bullish until the major averages and leading stocks violate their respective 50 DMA lines. Until then, the market deserves the bullish benefit of the doubt. Barring some unforeseen event, investors will likely be focusing on the jobs market this week and then turn their attention to Q2 earnings. If you are looking for specific help navigating this market, please contact us for more information.
 

 

 

 

 

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01 Jul
Daily Market Commentary

2nd Half Of 2011 Begins!

Friday, July 1, 2011
Stock Market Commentary:

As of June 30, 2011’s close, all of the major U.S. averages closed up a few percentage points for the year. For the second quarter the results were flat to mixed, largely due to renewed debt woes in Europe, a global economic slowdown, and the end of QE 2. The major averages remain perched below short term resistance of their multi-week sideways trading range with support near the 200DMA and near term resistance near their respective 50DMA lines. Intermediate term resistance (shown above) remains near the 2011 highs.

Monday-Wednesday’s Action: Stocks Bounce Off Support (200 DMA line)

On Monday, stocks bounced off support (200 DMA line) as investors waited for the Greek government to vote on the latest round of austerity measures. U.S. consumer spending was unchanged in May for the first time in almost a year. The Commerce Department said consumer spending was flat, following 10 straight monthly gains and followed a downwardly revised +0.3% gain in April. The unchanged reading was slightly lower than the Street’s +0.1% forecast. After adjusting the data for inflation, spending slid -0.1% in May which does not bode well for the ongoing economic recovery.
On Tuesday, stocks opened higher after Nike reported solid quarterly results and the S&P Case-Shiller index topped estimates. The S&P/Case-Shiller composite index of 20 metropolitan areas slid -0.1% on a seasonally adjusted basis. This topped the Street’s estimate for a decline of -0.2% and suggests buyers showed up in the second quarter. On a non-seasonally adjusted basis, the index increased +0.7% which was its first advance in eight months. Elsewhere, investors bid “risk” assets higher ahead of Greece’s austerity vote on Wednesday.
Before Wednesday’s open, the Greek Parliament passed a key vote which allows the country to begin their much needed austerity measures. So-called risk assets (stocks, currencies, commodities, etc.) were volatile right after the announcement but edged higher as investors digested the news. Part 2 of the vote passed on Thursday which helped allay the near term debt woes from Greece. Elsewhere, the National Association of Realtors said pending home sales vaulted +8.2% from April which easily topped the Street’s estimate for a +3% gain. This was the latest in a series of stronger-than-expected economic reports from the ailing housing market and bodes well, by extension, for the broader economy.

Thursday & Friday’s Action: Stocks Rally Into Resistance (50 DMA Line)

On Thursday, the Labor Department said initial jobless claims fell by -1,000 last week to 428,000. The longer term four-week average, came in at 426,750, which remained above the dreaded 400,000 mark. Investors were happy to see that Chicago PMI jumped to 61.1 which easily topped the Street’s estimate for 53 and bodes well for the economic recovery. In other news, the second quarter came to a close which also marks the end of the Fed’s QE II program. It will be interesting to see if risk assets and the broader economy can continue to advance even when QE II is off the table. Stocks opened flat to lower on Friday after slower than expected economic news was released from Asia (Taiwan, China, and Japan). Markets barely moved after the latest read on U.S. consumer confidence and the ISM mfg data were positive.

Market Outlook- Market In A Confirmed Uptrend:

The last week of June’s strong action suggests the market is back in a confirmed rally. Normally, we like to see one powerful up day to confirm a new rally and we like to see the major averages exhibit strong action in the days and weeks that follow. On Tuesday, June 21, 2011 we said the Nasdaq produced a new FTD which confirmed the latest rally attempt and then two days later said the rally failed when stocks were smacked in heavy trade. However, hindsight shows us that we erred by saying the rally failed because the bulls showed up and promptly defended the 200 DMA line. Or, if you prefer, one can argue that the new rally was confirmed when the major averages jumped back above their respective 50 DMA lines in late June. In either event, it is pointless to argue with the market. The action is strong and remains strong as long as the major averages remain above their respective 50 DMA lines. If you are looking for specific help navigating this market, please contact us for more information.

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30 Jun
Daily Market Commentary

2nd Quarter & QE2 End, Finally!

Thursday, June 30, 2011
Stock Market Commentary:

It has been long first half of the year for global capital markets. Stocks and a slew of commodities hit fresh 2011 highs on May 2, the day after Osama Bin Laden was taken out. In early May, many of these so-called “risk” assets got smacked and spent the next 4-6 weeks pulling back before finding support near their respective 200 DMA lines. The underlying fundamental concern is that the global economy is slowing down and QE 2 is slated to end on June 30, 2011. The major averages remain trapped in the middle of their multi-week sideways trading range with support near the 200DMA and resistance near their 50DMA lines.

Jobless Claims, Chicago PMI Beat Estimates, & QE 2 Ends:

On Thursday, the Labor Department said initial jobless claims fell by -1,000 last week to 428,000. The longer term four-week average, came in at 426,750, which remained above the dreaded 400,000 mark. Investors were happy to see that Chicago PMI jumped to 61.1 which easily topped the Street’s estimate for 53 and bodes well for the economic recovery. In other news, the second quarter came to a close which also marks the end of the Fed’s QE II program. It will be interesting to see if risk assets and the broader economy can continue to advance even when QE II is off the table.

Market Outlook- Market In A Correction:

The market is back in a correction after another failed follow-through day on Tuesday, June 21, 2011. Now that we are back in a correction, defense remains the best offense. The next level of support for the major averages is their respective 200 DMA lines and then their March lows. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
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. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. Two days later, on Thursday, June 23, 2011, our outlook changed to “Market In A Correction”after the market sold off hard on renewed economic woes. If you are looking for specific help navigating this market, please contact us for more information.

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29 Jun
Daily Market Commentary

Greek Vote Yes!

Wednesday, June 29, 2011
Stock Market Commentary:

Stocks edged higher as investors digested the latest round of economic data and the Greek government voted “yes” to the much anticipated austerity measures. The major averages bounced nicely during the first half of this week but volume, an important indicator of institutional sponsorship, declined which is not ideal. Normally, one would like to see stocks rally on heavier volume and decline on lighter volume. However, the opposite has been true since the beginning of May. The major averages remain trapped in the middle of their multi-week sideways trading range with support near the 200DMA and resistance near the recent chart lows (SPX 1294) and then the 50DMA.

Greek Vote, Pending Home Sales

Before Wednesday’s open, the Greek Parliament passed a key vote which allows the country to begin their much needed austerity measures. So-called risk assets (stocks, currencies, commodities, etc.) were volatile right after the announcement but edged higher as investors digested the news. Part 2 of the vote is scheduled for Thursday and it will be interesting to see how the markets react to that news. Elsewhere, the National Association of Realtors said pending home sales vaulted +8.2% from April which easily topped the Street’s estimate for a +3% gain. This was the latest in a series of stronger-than-expected economic reports from the ailing housing market and bodes well, by extension, for the broader economy.
Market Outlook- Market In A Correction:
The market is back in a correction after another failed follow-through day on Tuesday, June 21, 2011. Now that we are back in a correction, defense remains the best offense. The next level of support for the major averages is their respective 200 DMA lines and then their March lows. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
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. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. Two days later, on Thursday, June 23, 2011, our outlook changed to “Market In A Correction”after the market sold off hard on renewed economic woes. If you are looking for specific help navigating this market, please contact us for more information.

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28 Jun
Daily Market Commentary

The "Bounce" Continues

Tuesday, June 28, 2011
Stock Market Commentary:

Stocks opened higher after Nike (NKE) reported stronger-than-expected quarterly results and the latest data from the ailing housing market topped estimates. This will be a busy week for investors as a slew of economic data will be released, QE 2 and the second quarter will end. The major averages remain trapped in the middle of their multi-week sideways trading range with support near the 200DMA and resistance near the recent chart lows (SPX 1294) and then the 50DMA.

S&P Case-Shiller Index Tops Estimates, Greece Austerity Vote

On Tuesday, stocks opened higher after Nike reported solid quarterly results and the S&P Case-Shiller index topped estimates. The S&P/Case-Shiller composite index of 20 metropolitan areas slid -0.1% on a seasonally adjusted basis. This topped the Street’s estimate for a decline of -0.2% and suggests buyers showed up in the second quarter. On a non-seasonally adjusted basis, the index increased +0.7% which was its first advance in eight months. Elsewhere, investors bid “risk” assets higher as Greece ahead of Greece’s austerity vote on Wednesday.
Market Outlook- Market In A Correction:
The market is back in a correction after another failed follow-through day on Tuesday, June 21, 2011. Now that we are back in a correction, defense remains the best offense. The next level of support for the major averages is their respective 200 DMA lines and then their March lows. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
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. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. Two days later, on Thursday, June 23, 2011, our outlook changed to “Market In A Correction”after the market sold off hard on renewed economic woes. If you are looking for specific help navigating this market, please contact us for more information.

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27 Jun
Daily Market Commentary

Stocks Bounce Off Support

Monday, June 27, 2011
Stock Market Commentary:

Stocks bounced off support (200 DMA line) on Monday as investors continue to wait for a near term solution for Greece. This will be a busy week for investors as a slew of economic data will be released (shown below), QE 2 and the second quarter will end. The major averages remain trapped in the middle of their multi-week sideways trading range with support near the 200DMA and resistance near the recent chart lows (SPX 1294) and then the 50DMA.

Monday: Greece Austerity Vote Nears & U.S. Consumer Spending Unchanged

On Monday, stocks bounced as investors waited for the Greek government to vote on the latest round of austerity measures. U.S. consumer spending was unchanged in May for the first time in almost a year. The Commerce Department said consumer spending was flat, following 10 straight monthly gains and followed a downwardly revised +0.3% gain in April. The unchanged reading was slightly lower than the Street’s +0.1% forecast. After adjusting the data for inflation, spending slid -0.1% in May which does not bode well for the ongoing economic recovery.
Market Outlook- Market In A Correction:
The market is back in a correction after another failed follow-through day on Tuesday, June 21, 2011. Now that we are back in a correction, defense remains the best offense. The next level of support for the major averages is their respective 200 DMA lines and then their March lows. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
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. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. Two days later, on Thursday, June 23, 2011, our outlook changed to “Market In A Correction” after the market sold off hard on renewed economic woes. If you are looking for specific help navigating this market, please contact us for more information.

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MONDAY: Consumer Spending, Earnings from Nike
TUESDAY: S&P Case-Shiller home price index, consumer confidence, 5-yr note auction, IMF board to select new chief
WEDNESDAY: Weekly mortgage apps, pending home sales index, oil inventories, 7-yr note auction, farm prices, Dell analyst meeting, Fed meeting on card fees; Earnings from Family Dollar, General Mills, KB Home, Monsanto
THURSDAY: Q2 Ends, Weekly jobless claims, Fed’s Bullard speaks, Chicago PMI, End of QE2, Marathon Oil split takes place
FRIDAY: Q3 Begins, Consumer sentiment, ISM mfg index, construction spending, Biden’s deadline for deficit plan, HP launches TouchPad, auto sales
Source: CNBC.com
 

24 Jun
Daily Market Commentary

Stocks End Week Relatively Flat

Friday, June 24, 2011
Stock Market Commentary:

Stocks ended relatively flat to slightly higher as investors digested a very busy week of data. After the dust setteled, the major averages were little changed but remain trapped in the middle of their multi-week sideways trading range with support near the 200DMA and resistance near the recent chart lows (SPX 1294) and then the 50DMA line.

Monday-Wednesday’s Action: Greece and Fed Dominate The Headlines

On Monday, stocks and a slew of commodities ended mixed as investors waited for the next step in the ongoing situation in Greece to unfold. On Tuesday, stocks soared as investors were waiting for a positive confidence vote from Greece and the conclusion of the Fed’s latest meeting. Existing home sales fell -3.8% to a 4.81 million annual rate in May. After Tuesday’s close, the Greek Prime Minister won the much anticipated confidence vote which helped ease tensions in the region. Stocks were smacked on Wednesday effectively ending their latest (short-lived) rally attempt when the Federal Reserve held rates steady but lowered their growth targets for 2011 and 2012.

Thursday & Friday’s Action: Sloppy Action; Support Holds!

Before Thursday open, the Labor Department said weekly jobless claims rose +9,000 t0 429,000 last week which still above the dreaded 400,000 level. Elsewhere, new home sales slid -2.1% in May to 319,000, which topped the Street’s 305,000 estimate. In a healthy data point for the ailing housing market, the number of new homes on the market fell -6,000 to 166,000 which was the lowest level in 50 years. In  a surprise move to lower energy prices, the International Energy Agency (IEA) said 60 million barrels of oil would be released from strategic government stockpiles across the globe. The underlying logic behind the move was that lower oil prices may help stimulate the global economy. Only time will tell. Before Friday’s open, two important stronger than expected economic data points were released. GDP rose +1.9%, topping the Street’s estimate of +1.8%. A separate report showed that durable goods orders rose +1.9%, topping the Street’s +1.5% forecast and also topped April’s reading of -2.7%.

Market Outlook- Market In A Correction:

The market is back in a correction after another failed follow-through day on Tuesday, June 21, 2011. Now that we are back in a correction, defense remains the best offense. The next level of support for the major averages is their respective 200 DMA lines and then their March lows. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
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. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. Two days later, on Thursday, June 23, 2011, our outlook changed to “Market In A Correction” after the market sold off hard on renewed economic woes. If you are looking for specific help navigating this market, please contact us for more information.

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23 Jun
Daily Market Commentary

Rally Ends; Stocks Smacked

Thursday, June 23, 2011
Stock Market Commentary:

Stocks and a slew of commodities got smacked on Thursday after the Fed meeting and a slew of disappointing economic data was released. Thursday’s ominous action effectively ended any chance of a rally and suggests the bears are back in control of this market.

Jobless Claims Rise, New Home Sales Fall, & IEA Takes Emergency Measures:

Before Thursday open, the Labor Department said weekly jobless claims rose +9,000 t0 429,000 last week which still above the dreaded 400,000 level. Elsewhere, new home sales slid -2.1% in May to 319,000, which topped the Street’s 305,000 estimate. In a healthy data point for the ailing housing market, the number of new homes on the market fell -6,000 to 166,000 which was the lowest level in 50 years. In  a surprise move to lower energy prices, the International Energy Agency (IEA) said 60 million barrels of oil would be released from strategic government stockpiles across the globe. The underlying logic behind the move was that lower oil prices may help stimulate the global economy. Only time will tell.

Market Outlook- Market In A Correction:

The market is back in a correction after another failed follow-through day on Tuesday, June 21, 2011. Now that we are back in a correction, defense remains the best offense. The next level of support for the major averages are their respective 200 DMA lines and then their March lows. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
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. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. Two days later, on Thursday, June 23, 2011, our outlook changed to “Market In A Correction” after the market sold off hard on renewed economic woes. If you are looking for specific help navigating this market, please contact us for more information.

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