Stocks Smacked As Global Economy Slows

Byinfo@50park.com
Gold Slices Below Both Its 50 & 200 DMA Lines!
Gold Slices Below Both Its 50 & 200 DMA Lines!

Tuesday, March 06, 2012
Stock Market Commentary:

Stocks were under pressure as several global economic powerhouses reported weaker than expected GDP growth. From our point of view, the major averages confirmed their latest rally attempt on Tuesday 1.3.12 which was Day 9 of their current rally attempt. Since then, stocks have been enjoying a very strong uptrend. However, the benchmark S&P 500 encountered resistance above its 2011 high (~1370) and is currently pulling back to consolidate its recent move. It would be perfectly normal and healthy to see a 5-9% pullback before a new leg higher begins. That would bring the S&P 500 down to 1310-1240. Until then, the bulls remain in control of this market as long as the benchmark S&P 500 stays above its 50 DMA line.

Stocks Fall On Super Tuesday As Global Growth Slows:

Before Tuesday’s open, stock markets across the globe were under pressure as fear spread that the global economic recovery would slow materially. Brazil said its economy will grow by less than 3% in 2012 which was way below estimates. Fear spread that Europe will  officially enter another recession and Greece will default on their debt. ICSC-Goldman Store Sales, which is an index that measures comparable same-store sales across the country, rose +1.3% in the first week of March. However, the year-on-year rate fell to +1.7%, from +2.7%. On the political front, the much awaited Super Tuesday finally arrived. It will be a pivotal day for the GOP, either solidifying Romney’s lead or causing a split within the already fragmented base.

Market Outlook- Confirmed Rally

Risk assets (stocks, FX, and commodities) have finally began to pullback which is considered normal as long as this pullback is mild and stops at logical levels of support (i.e. prior chart highs, 50 DMA line, etc). However, if the selling intensifes and support is breached then the bears will have regained control of this market. As always, keep your losses small and never argue with the tape. If you are looking for specific help navigating this market, feel free to contact us for more information. That’s what we are here for!
 

Similar Posts

  • Strong Housing & Earnings Lift Stocks!

    Byinfo@50park.com

    Market Outlook- Uptrend Under Pressure:
    The last week of June’s strong action suggests the market is back in a confirmed rally. As our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the current rally is under severe pressure as investors patiently await earnings season and continue to digest the latest economic data. Until all the major averages violate their respective 50 DMA lines on a closing basis, the market deserves the bullish benefit of the doubt. If you are looking for specific help navigating this market, please contact us for more information.
    Stock Market Research?
    Global Macro Research?
    Want To Follow Trends?
    Learn How We Can Help You!

  • Stocks Flirt With Resistance

    Byinfo@50park.com

    The benchmark S&P 500 Index marked Day 14 of its current rally attempt and is currently encountering resistance just below its 200 DMA line. The Dow Jones Industrial Average marked Day 5 of its latest rally attempt while the Nasdaq Composite marked Day 3. At this point, the window is now open for the major averages to produce a sound follow-through day (FTD) until the recent lows are breached. Furthermore, it is well known that a market should not be considered “healthy” unless it trades above its rising 200-day moving average (DMA) line. The fact that all the major averages are below both their 50 & 200 DMA lines bodes poorly for the near term. That said, the bears will likely remain in control until the popular averages close above their important moving averages. Trade accordingly.

  • Stocks Close Above Resistance

    Byinfo@50park.com

    All the major averages traded above their respective two month downward trendlines and their 50 DMA lines on Thursday. However, it is a bit disconcerting to see volume recede as the market moves higher. This is the exact opposite of what one would like to see when the major averages rally. It is also important to note that the major averages are rallying up to an area where they encountered resistance several times in recent weeks and they are still below their longer term 200 DMA lines. That said, we can not argue with the tape and the bulls deserve the bullish benefit of the doubt until this “breakout” is negated. Trade accordingly.

  • Earnings Miss; Stocks React

    Byinfo@50park.com

    Market Outlook- In A Correction:
    The major U.S. averages are still in a “correction” as they continue to bounce towards resistance of their 2-month base. The latest follow-through day (FTD) which began on August 23, 2011 has officially ended which means we will continue “counting” days before a new rally can be confirmed. In addition, it is important to note that the bulls scored a victory since many of the major averages closed above their downward sloping 50 DMA lines for the first time since late July! The next stop is September’s highs and then their 200 DMA lines. Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. . If you are looking for specific help navigating this market, please contact us for more information.
    Fall Sale- We Will Double Your Order!!!
    Limited-Time Offer!
    www.FindLeadingStocks.com

  • Earnings & M&A News Lifts Stocks

    Byinfo@50park.com

    It is important to note that the major averages have been steadily rallying since early February and a pullback of some sort should be expected. Tuesday marked the latest distribution day since the rally was confirmed on the March 1, 2010 follow-through day (FTD). According to the paper, there are 6 distribution days for the NYSE, 5 for the S&P 500, 4 for the Dow, and 3 for the Nasdaq in recent weeks. This puts some pressure on this 9-week rally, but has yet to cause any technical damage. The fact that the market continues to shrug off any and all negative data bodes very well for this 13-month bull market.