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  • Stocks Consolidate Last Week's Advance

    Monday, January 10, 2011 Stock Market Commentary: The major averages ended mixed to slightly lower as the USD pulled back to consolidate last week’s impressive advance. Heretofore, market internals remain healthy evidenced by broad leadership, favorable volume patterns, a rising advance/decline line, and a healthy number of new highs on both major exchanges. M&A News…

  • Stocks Flirt With Resistance

    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.

  • 6th Consecutive Weekly Decline

    Market Outlook- Market In A Correction:
    From our point of view, the market is back in a correction now that all the major averages closed below their respective 50 DMA lines and important upward trendlines. Since the beginning of May, we have urged our clients and readers to be extremely cautious as the major averages and a host of commodities began selling off.
    For those of you that are interested, the S&P 500 hit a new 2011 high on May 2, 2011. Two days later, on Wednesday, May 4, 2011, we turned cautious and said “The Rally Was Under Pressure” (read here). Then on Monday, 5.23.11, we changed our outlook to “Market In A Correction” (read here). On Monday June 6, 2011 we pointed out that the S&P 500 violated its 9-month upward trendline (read here) and reiterated our cautious stance. We have received a lot of “thank you” emails for being “spot on” in our cautious approach. We are humbled by your presence and very thankful for your continued support. Looking forward, the next level of resistance for the major averages is their respective 50 DMA lines then their 2011 highs. The next level of support is their longer term 200 DMA lines. If you are looking for specific help navigating this market, please contact us for more information.
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  • Stocks Dive On Tepid Housing Data

    The technical action in the major averages continues to weaken alongside the latest round of tepid economic data. Currently, resistance for the the major averages are their 50 DMA lines, then their longer term 200 DMA lines. It is also disconcerting to see the action in several leading stocks remain questionable as evidenced by the dearth of high-ranked leaders breaking out of sound bases.
    From our perspective, Monday’s negatively reversal coupled with Tuesday’s ugly distribution day effectively ended the latest rally attempt which emphasizes the importance of remaining cautious until the rally is back in a confirmed uptrend. Put simply, we can expect this sideways/choppy action to continue until the market breaks out above resistance or below support (recent chart lows). The first scenario will have bullish ramifications while the second will be clearly bearish. Trade accordingly.