Week-In-Review: Stocks Rally As Earnings Season Begins

Byinfo@50park.com

Stocks Rally As Earnings Season Begins

Stocks ended higher last week as investors digested a busy week of macro data and earnings season officially began.  The big bullish catalyst last week came from global central banks. The U.S. Fed and the European Central Bank (ECB) made dovish comments which prompted buyers to return from a 4-week hiatus. First, Janet Yellen softened her recent slightly hawkish stance when she gave a somewhat dovish testimony on Capitol Hill. Second, the ECB said it is ready to print money (continue QE) for the next few years. This was a bullish one-two punch that helped buyers return to the market. Earnings season officially kicked off last week and a slew of companies will be reporting over the next several weeks. Remember, in addition to analyzing the data, we focus more on how the market reacts to the data. Three of the big banks opened lower on Friday after reporting earnings: Wells Fargo (WFC), JP Morgan (JPM) and Citigroup (C). So far, that is not ideal but we’ll see how it plays out over the next few weeks.

Mon-Wed Action:

Stocks closed mostly higher on Monday as investors prepared for earnings season. Amazon’s stock jumped nearly 2% as the company got set for its big Prime Day sales. Prime Day features big deals for Amazon’s Prime customers and tries to encourage non-prime members to join prime. Needless to say, Prime Day was a huge success for the company. On Tuesday, stocks ended higher in a volatile session after Donald Trump Jr. released a chain of emails that showed direct connection with a Russian lawyer. Intra-day, the Dow fell about 100 points but recovered by the close, again showing how strong the market is right now. Minneapolis Fed President Neel Kashkari said U.S. banks are still too big to fail which barely moved the needle. Stocks rallied nicely on Wednesday after Janet Yellen gave dovish testimony on Capitol Hill. Yellen basically said the Fed is ready to shift back to an easy money policies if conditions deteriorate. Big money also flowed into a slew of beaten down tech stocks as they come back into play.

Thur & Fri Action:

On Thursday, stocks rallied helping the Dow hit a fresh record high. The ECB said it is ready to continue QE for the next few years which is also a very dovish stance. Remember, the entire move from the historic 2009 low was based on easy money from global central banks. So the fact that they are still ready to shift back to an ultra-easy money stance was enough to bring buyers back into the market. Stocks edged higher on Friday after Wells Fargo, JP Morgan and Citigroup all reported earnings. Interestingly, all three stocks fell in the morning but the broader market still rallied.

Market Outlook: Bulls Defend Support

The bulls showed up and defended important support in June which is very bullish for the market. As we have said several times over the past month, as long as support holds, the bulls remain in control of this market. As always, keep your losses small and never argue with the tape. Get Our Free e-Book: Learn How To Buy Leading Stocks…EARLY. Get It Here…

Similar Posts

  • Stocks Slide on On Libya Woes

    Byinfo@50park.com

    Market Action- Confirmed Rally; Week 26 Ends
    It was encouraging to see the bulls show up and defend the major averages’ respective 50 DMA lines in November as this market proves resilient and simply refuses to go down. From our point of view, the market remains in a confirmed rally until those levels are breached. The tech-heavy Nasdaq composite and small-cap Russell 2000 indexes continue to lead evidenced by their shallow correction and strong recovery. However, it is important to note that stocks are a bit extended here and a pullback of some sort (back to the 50 DMA lines) would do wonders to restore the health of this bull market. If you are looking for specific high ranked ideas, please contact us for more information.
    Are You Looking For Someone To Manage Your Money?
    Our Private Wealth Management Services Can Help You!

  • Consumer Spending, Incomes, & Inflation Rise

    Byinfo@50park.com

    Market Action-Confirmed Uptrend
    From our point of view, the market is back in a confirmed uptrend after a modest (and healthy)-6% correction from its post-recovery highs. The fact that the Dow Jones Industrial Average, small-cap Russell 2000 index, and Copper all closed above their respective 50 DMA lines on Wednesday March, 23 was a very healthy sign and suggests higher prices will follow. The very next day, the benchmark S&P 500 regained that important level and broke above its downward trendline (shown above). Couple that with the fact that other markets like Oil, Silver, and Gold are all at fresh post recovery highs suggests it is only a matter of time until equities follow. The final bullish sign for us was that a slew of high ranked stocks triggered fresh technical buy signals this week which suggests higher, not lower prices lie ahead! If you are looking for specific help navigating this market, please contact us for more information.
    Don’t Miss Out!
    Have You Seen How Our New Site Can Help You!
    Visit: www.SarhanCapital.com Today!

  • Flurry of M&A News Lifts Stocks

    Byinfo@50park.com

    Tuesday, August 17, 2010
    Stock Market Commentary: The technical action in the major averages is not ideal. Currently, resistance for the Dow Jones Industrial Average is its 200 DMA line, while the Nasdaq composite faces resistance at its 50 DMA line. Meanwhile, the benchmark S&P 500 index managed to close above its 50 DMA line but still faces resistance near its 200 DMA line (1,116) and then its prior chart highs near 1,131. The action in leading stocks remains questionable at best which is another disconcerting sign. Tuesday’s action does not change our cautious outlook. 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.

  • Stocks Wait For Friday's Jobs Report

    Byinfo@50park.com

    Market Action- Market In Confirmed Rally Week 19
    It was encouraging to see the bulls show up in November and defend the major averages’ respective 50 DMA lines. The market remains in a confirmed rally until those levels are breached. The tech-heavy Nasdaq composite and small-cap Russell 2000 indexes continue to lead evidenced by their shallow correction and strong recovery. However, it is important to note that stocks are a bit extended here and a pullback of some sort (back to the 50 DMA lines) would do wonders to restore the health of this bull market. Put simply, stocks are strong. Trade accordingly. If you are looking for specific high ranked ideas, please contact us for more information.

Leave a Reply

Your email address will not be published. Required fields are marked *