Wednesday, September 1, 2010 Stock Market Commentary: Stocks soared on Wednesday, produced a proper follow-through day (FTD), and confirmed their latest rally attempt (which began on Friday) after fear eased that the global economic recovery was in peril. Wednesday’s reported volume totals were higher on the NYSE and the Nasdaq exchange compared to Tuesday’s already high levels which suggests large institutions…
Tuesday, January 5, 2010 Market Commentary: The major averages closed mixed after spending most of the session in the red as investors digested the latest round of mixed economic data. Volume, an important indicator of institutional sponsorship, was reported higher than Monday’s totals which indicated large institutions were not aggressively dumping stocks. Advancers led decliners…
Looking at the market, the action remains constructive. The Dow Jones Industrial Average, small cap Russell 2000 Index, S&P 500 Index, Nasdaq Composite and NYSE Composite indices are all trading near fresh 2009 highs which bodes well for this rally. The inverse relationship with the US dollar has eased in recent weeks as both stocks and the greenback have rallied in tandem. Ideally, one would like to see leadership and volume expand over the next few weeks as the major averages continue advancing.
Tuesday, December 29, 2009 Market Commentary: The major averages traded between positive and negative territory before ending lower as investors digested the latest round of mixed economic data. Volume, an important indicator of institutional sponsorship, was lower than Monday’s session which indicated large institutions were not aggressively dumping stocks. Advancers were about even with decliners…
The market closed higher for the week and on Thursday’s shortened pre-holiday session. Volume, an important indicator of institutional sponsorship, was lighter than Wednesday’s levels, again revealing the lack of appetite for accumulating shares from very large and influential institutional investors. Advancers led decliners by nearly a X-to-X ratio on the NYSE and by over…
Tuesday, December 22, 2009 Market Commentary: Stocks in the US closed higher after the latest round of economic data was released. Volume, an important indicator of institutional sponsorship, was lower than Monday’s levels. Advancers led decliners by nearly a 2-to-1 ratio on the NYSE and by a 16-to-11 ratio on the Nasdaq exchange. There were…
On Wednesday, the major averages closed near important resistance levels as leading stocks were mixed. The Dow Jones Industrial Average and benchmark S&P 500 index closed below 10,500 and 1,115, their respective resistance levels. The Nasdaq composite closed just above 2200 which has served as an important level of resistance for the tech heavy index in recent months.
At this point, the action remains healthy as long as the major averages remain above their respective 50-day moving average lines. So far the market has held up rather nicely to the slew of economic data that was released this week. As long as this action continues, the major averages deserve the bullish benefit of the doubt.
Looking at the recent action in the market, the Dow Jones Industrial Average and benchmark S&P 500 index enjoyed their best close of the year as they continue flirting with important resistance levels (10,500 and 1,115 respectively.). The major averages continue acting well as they remain perched just below resistance (their respective 2009 highs) and above their respective 50-day moving average lines. Both these factors are considered healthy and bodes well for this 8-month (41-week) rally. It was also encouraging to see the Nasdaq close above 2,200 which has served as formidable resistance over the past few months. A slew of economic data is slated to be released this week and, as always, it will be very important to see how the market reacts to that news.
Around 2pm EST the greenback started to fall and U.S. stocks started to rally. Apple Inc. (AAPL) vaulted +$7.66, or +4.18%, and closed above its 50 DMA line on above average volume. Apple has been a strong leader since the March lows and the fact that it quickly repaired the damage is a bullish sign for this rally. A new crop of high ranked stocks are currently working on new bases (Read:10 Stocks on My Watchlist 12.09.09) as the major averages continue consolidating their recent gains above their respective 50 DMA lines. It was encouraging to see the benchmark S&P 500 bounce off support (shown above) for the fourth time in the past few weeks. To be clear, the bulls deserve the bullish benefit of the doubt until the major averages close below their respective 50 DMA lines. At this point, they are acting well and appear to want to move higher.
The market remains resilient as it simply refuses to go down. Longstanding readers of this column know that we prefer to focus more on how the market reacts to the news than the news itself. That said, the bears had all the possible ammunition to send stocks plunging on Tuesday and the fact that they did not (or could not), speaks volumes. In addition, the market remains strong since it has barely “corrected” and continues consolidating its recent move just below resistance. The bulls deserve the bullish benefit of the doubt until one of the major averages trades, and closes, below its respective 50 day moving average line.