Stocks End Higher; Volume Light

Monday, July 19, 2010
Stock Market Commentary

The major averages ended higher on Monday after getting smacked on Friday. As expected, volume was reported lower than Friday’s session on both exchanges due to options expirations. There were only 7 high-ranked companies from the Leaders List that made a new 52-week high and appeared on the BreakOuts Page, higher than the 4 issues that appeared on the prior session. Advancers led decliners by a 12-to-7 ratio on the NYSE and by a 8-to-5 ratio on the Nasdaq exchange. New 52-week highs solidly outnumbered new 52-week lows on the NYSE but trailed on the Nasdaq exchange.  For the rally to have ongoing success it will be critical for a healthy crop of leaders to continue showing up hitting new 52-week highs.

Housing Confidence Plunges:

The National Association of Home Builders/Wells Fargo confidence index slid to 14 in July which is the the lowest reading since April 2009 and down from last month’s reading of 16. Any reading below 50 means that respondents consider the current environment as poor. Later this week housing starts and existing home sales are slated to be released which will give the latest read on the ailing housing market. The major averages continue to face stubborn resistance near last week’s highs and their respective multi month downward trendline and moving averages. Over the next few weeks, it will be very interesting to see how companies fared last quarter and, equally important, to see how the market reacts to the numbers. Analysts believe that Q2 earnings for S&P 500 companies rose +34%.

Market Action- Rally Under Pressure:

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