7 Things That Concern Me About This Rally- Right Now

7 Things That Concern Me About This Rally- Right Now

Byinfo@50park.com

1. We have come too far too fast. How many times do you remember seeing the SP500 soar 17% in 3 weeks (or know of it ever happening in history)? And the kicker- the move has been on below average volume! Moreover, if the market is to get back to 1370 (2011 highs) by year end- it will have to move 28% from Oct 4- Dec 31. Possible, but probable?
2. Nothing has changed- the “fundamental” mess that sent a slew of risk assets lower over the summer (i.e. US and EU debt issues, anemic economic growth, etc.)- are still unresolved… Everyone (right now) is focused on Greece. However, even if Greece is “handled” it does not address the broader issue: The other PIIGS are broke!
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3. Most bear markets last 18-24 months- not less than 1 day. The S&P 500 officially hit bear market territory on 10/4 (down 20% from its 2011 high) and that lasted for a tenth of a second because that was the exact low for the year (so far). Normally, the 18-24 months allow stocks to reset their bases and paves the way for new leadership to emerge.

Stocks Edge Higher As Dollar Falls

Stocks Edge Higher As Dollar Falls

Byinfo@50park.com

Overall, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) remains healthy. Looking forward, the window is now open for disciplined investors to begin carefully buying high-ranked stocks again. It was encouraging to see a flurry of high-ranked leaders trigger fresh technical buy signals and break out of sound bases in recent weeks. All the major averages rallied above their respective 200-day moving average (DMA) lines this week, which is another encouraging sign. The next important resistance level the major averages are facing is their respective summer highs.

Stocks Down; Dollar Up

Stocks Down; Dollar Up

Byinfo@50park.com

Wednesday, March 24, 2010 Market Commentary: The major averages, US Treasuries, the euro and a slew of commodities pulled back as the dollar advanced after Portugal’s debt was downgraded by Fitch.The volume total on the NYSE was about even compared to Monday’s totals, while volume was reported slightly higher on the Nasdaq exchange. Decliners led advancers by more than…

Stocks Edge Higher On Stronger Than Expected Housing Market

Stocks Edge Higher On Stronger Than Expected Housing Market

Byinfo@50park.com

The fact that there has only been one distribution day since the follow-though-day (FTD) bodes well for this nascent rally. It is also a welcome sign to see the market continue to improve as investors digest the latest round of stronger than expected economic and earnings data. Remember that now that a new rally has been confirmed, the window is open to proactively be buying high quality breakouts meeting the investment system guidelines. Trade accordingly.

Bulls Celebrate March '09 Bottom

Bulls Celebrate March '09 Bottom

Byinfo@50park.com

Since last the March 1, FTD the market and a batch of leading stocks steadily rallied. The fact that we have not seen any serious distribution days since the FTD bodes well for this nascent rally. It is also a welcome sign to see the market continue to improve as investors digest the latest round of stronger than expected economic and earnings data. Remember that now that a new rally has been confirmed, the window is open to start buying high quality breakouts. Trade accordingly.

Cautious Follow-Through Day Confirms New Rally

Cautious Follow-Through Day Confirms New Rally

Byinfo@50park.com

Cautious Follow-Through Day Confirms New Rally.Looking at the market, Monday, Day 16 of the latest rally attempt, confirmed the latest rally attempt when a “cautious follow-through day” was produced by the Nasdaq composite. This means that we will now be looking for any distribution days (high volume declines) to emerge to gauge the strength of this nascent rally. So far, it is a much welcomed sign to see the market continue to improve as investors digest the latest round of stronger than expected economic and earnings data. Remember that now that a new rally has been confirmed the window is now open to start buying high quality breakouts. Trade accordingly.

Day 8: Both Stocks & The US Dollar Rally

Day 8: Both Stocks & The US Dollar Rally

Byinfo@50park.com

Looking at the market, the major averages closed with modest gains on Wednesday as the major averages consolidate their recent move. As long as February 5th lows are not breached the window remains open for a new follow-through day (FTD) to emerge. A new follow-through day will confirm the current rally attempt and will be produced when one of the major averages rallies at least +1.7% on higher volume than the prior session as a new batch of leaders breakout of sound bases. However, if the February 5, 2010 lows are breached then the day count will be reset and a steeper correction may unfold.
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 acting as 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 which remains a concern. Remember that the market remains in a correction until a new new follow-through day emerges. Until then, patience is paramount.

Day 7: Light Volume Fails To Confirm The Latest Rally Attempt

Day 7: Light Volume Fails To Confirm The Latest Rally Attempt

Byinfo@50park.com

Tuesday, February 16, 2010 Market Commentary: The major averages ended higher after the latest round of stronger than expected economic and earnings data was released. Volume, a critical indicator of institutional sponsorship, was lower than the prior session on both exchanges which prevented the major averages from producing a sound follow-through day.  Advancers trumped decliners by…

Nasdaq Retreats; Other Major Averages Advance

Nasdaq Retreats; Other Major Averages Advance

Byinfo@50park.com

Stocks remain strong as investors digested the latest round of economic data. The benchmark S&P 500, Dow Jones Industrial Average, NYSE composite, mid-cap S&P 400, small-cap Russell 2000 and small-cap S&P 600 indices all enjoyed fresh recovery closing highs! The current rally is in its 44th week (since the March 12, 2009 follow-through day) and on all accounts still looks very strong. In addition, most bull markets last for approximately 36 months, so the fact that we are beginning our 10th month suggests we have more room to go. December’s jobs report will likely set the stage for the next near term move for the major averages but until support is broken (50 DMA lines for the major averages), this rally deserves the bullish benefit of the doubt.