Wednesday, September 8, 2010
Stock Market Commentary:
Stocks rallied across the globe as the dollar fell and EU debt woes eased. Wednesday’s volume totals were reported higher on the NYSE and on the Nasdaq exchange which suggested large institutions were accumulating stocks. Advancers led decliners by over a 2-to-1 ratio on the NYSE and almost a 2-to-1 ratio on the Nasdaq exchange. New 52-week highs easily outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange. There were 54 high-ranked companies from the CANSLIM.net Leaders List made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 31 issues that appeared on the prior session.
EU Debt Woes Ease & Fed’s Beige Book:
The bulls returned from a one day hiatus and sent stocks unanimously higher as the dollar fell and EU debt woes eased. Demand for Portugal’s debt was strong enough to allay concerns of another imminent EU debt crisis. Elsewhere, a handful of high ranked stocks raced higher which bodes well for this one-week rally. Stocks lost a little ground after the Federal Reserve released its Beige Book which showed the economy was easing across much of the country.
Market Action- Confirmed Rally:
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 sessions. The next important level to watch for the major averages are their respective 200-day moving average (DMA) lines. It is important to note that approximately 75% of FTDs lead to new sustained rallies, while 25% fail. In addition, every major rally in market history has begun with a FTD, but not every FTD leads to a new rally. Trade accordingly.