Day 1 Of A New Rally Attempt

Day 1 Of A New Rally Attempt

Byinfo@50park.com

Stocks took a heavy beating on Thursday, sending all the major averages below their respective 200 DMA lines on heavy volume. Stocks ended higher on Friday after the S&P 500, Russell 2000 and Nasdaq Composite all shook out below their May 6, 2010 (flash crash) low. For the week, all the major averages suffered tremendous losses and fell over -10% from their late April highs, which is the first time a pullback of that magnitude has occurred since the March 2009 low. The fact that the market rallied on Friday technically marked Day 1 of a new rally attempt which means the earliest a proper follow-through day (FTD) could occur would be Wednesday, providing Friday’s lows are not breached. However, if at anytime, Friday’s lows are breached, then the day count will be reset. What does all of this mean for investors? Simple, the market remains in a correction which reiterates the importance of adopting a strong defense stance until a new rally is confirmed. Trade accordingly.

Stocks Snap A 4 Week Losing Streak- 2.12.10

Stocks Snap A 4 Week Losing Streak- 2.12.10

Byinfo@50park.com

Friday, February 12, 2010 Market Commentary: The major averages snapped a four week losing streak after the EU said it will help Greece with its ballooning budget deficits. Stocks closed lower on Monday after concern spread that several European countries may default on their debt. Greece, Spain and Portugal are the three primary suspects for the latest sovereign debt crisis.  Monday- Friday Review:

Week In Review- 4th Consecutive Weekly Decline! 2.5.10

Week In Review- 4th Consecutive Weekly Decline! 2.5.10

Byinfo@50park.com

Looking at the market, Thursday’s ominous action took out Monday’s lows and effectively ended the brief rally attempt which suggests a steeper correction may unfold and resets the day count for a proper follow-through day to emerge. It is also important to see how the major averages react to their respective 50-day moving average (DMA) lines which were support and are now resistance. Until they all close above that important level the technical damage remaining on the charts is a concern. So far, the market’s reaction has been tepid at best to the latest round of economic and earnings data. Remember that the recent series of distribution days coupled with the deleterious action in the major averages suggests large institutions are aggressively selling stocks. Disciplined investors will now wait for a new follow-through day to be produced before resuming any buying efforts. Until then, patience is paramount. Our readers know that our defensive stance is not new- we have been defensive since January 23, 2010!