Stocks & Commodities End Mixed As Dollar Rallies

Monday, November 8, 2010
Stock Market Commentary:

Stocks and commodities ended mixed as the US dollar continued its three day advance. one day after the Federal Reserve announced a second round of quantitative easing. Volume patterns remain healthy as the major averages are now in their 10th week of their ongoing rally.On average, market internals remain healthy evidenced by an upward sloping Advance/Decline line and the fact that new 52-week highs continue to easily outnumber new 52-week lows on both exchanges.

Dollar and Gold Rally While Stocks and  Oil End Mixed:

The USD rallied for a third consecutive day. Normally, stocks and commodities fall when the US dollar rallies and the converse is also true. However, gold and several leading stocks rallied which suggests the bulls are still in control. The major averages ended near their highs which is also a net positive. The euro fell against the greenback largely due to Irish debt concerns. So far, the current rally remains intact with several sectors continuing to lead.

Market Action- Confirmed Rally, Week 11:

Heretofore, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been strong but the market action has been wide-and-loose which is not a healthy sign. The next level of support for the major averages is their September highs, then their respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly.

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