Stocks and a host of commodities rallied as traders returned from a long holiday weekend in the U.S. Other capital markets rallied on Monday after Europe made progress on talks for another Greek bailout. So far, the old adage, “Sell in May and Go Away,” appears to be working brilliantly. From our vantage point, the market is back in a confirmed rally now that support (multi-month upward trendline and 50 DMA line) was defended in May.
Greek Bailout & Economic Data Lifts Futures
On Monday, U.S. markets were closed in observance of Memorial Day but other markets across the world were open. The “big” news that helped lift a slew of so-called “risk-assets” (i.e. stocks and commodities) occurred when European officials agreed to another Greek bailout. This sent the euro, and equity futures, surging before Tuesday’s open. In other news, economic data from Asia, Europe, and Canada did not disappoint. Inflation slowed in much of Europe while German unemployment fell, both healthy events for the troubled euro zone. However, not all the news was positive. Denmark’s economy entered a recession after GDP fell -0.5% in Q1. Denmark has now joined Portugal as the only other European nation to be in a recession. Elsewhere, Canada’s GDP expanded at a 3.9% annualized rate in the first quarter which was nearly double the US’s 1.8% rate but fell short of the 4% expected on the Street. In other news, the U.S. housing market officially is in a double-dip recession as home prices fell another -4.2% in Q1 after falling –3.6% in Q4 2010.
Market Outlook- Market In A Confirmed Rally
From our point of view, the market is back in a confirmed rally now that all the major averages are back above their respective 50 DMA lines and downward trendlines. Since the beginning of May, we have urged caution as the major averages and a host of commodities began selling off. However, the fact that the pullback was shallow and the market found support at its 50 DMA line in late May, suggests higher, not lower, prices lie ahead. The next level of resistance is the 2011 highs. If you are looking for specific help navigating this market, please contact us for more information.
Host Of The #SmartMoneyCircle Podcast, Founder and CEO of 50 Park Investments. Adam provides weekly market updates to ChartYourTrade.com readers. He is a FORBES Contributor and is a frequent guest on all the major financial media outlets.
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Disclaimer: All communication from ChartYourTrade is general in nature and for educational and general informational purposes only. Under no circumstance should it be considered personalized investment advice. All our work is general in nature and not specific to any one person. All the information on this site and/or that originates from us, or any of our partners or affiliates, is for educational and informational purposes only and is NOT a recommendation to buy or sell anything. To avoid any conflicts of interest, we do not have a working relationship with any of the companies mentioned in our work. Furthermore, we may have a long, short, or no position in any, or all, of the names that appear in our work and they may change at any time without notice. Investing and trading in capital markets or using margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you as well as for you. Before you decide to invest or trade in capital markets you should carefully consider your investment objectives, level of experience, and risk appetite, among other factors. The possibility exists that you could sustain a loss of some, all, or more of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with capital markets, investing/trading, and seek specific investment advice from an independent financial advisor and other professionals. Remember all the information we provide is for educational and general informational purposes only and is subject to change without notice.
Downtrend Is Broken!
Tuesday, May 31, 2011
Stock Market Commentary:
Stocks and a host of commodities rallied as traders returned from a long holiday weekend in the U.S. Other capital markets rallied on Monday after Europe made progress on talks for another Greek bailout. So far, the old adage, “Sell in May and Go Away,” appears to be working brilliantly. From our vantage point, the market is back in a confirmed rally now that support (multi-month upward trendline and 50 DMA line) was defended in May.
Greek Bailout & Economic Data Lifts Futures
On Monday, U.S. markets were closed in observance of Memorial Day but other markets across the world were open. The “big” news that helped lift a slew of so-called “risk-assets” (i.e. stocks and commodities) occurred when European officials agreed to another Greek bailout. This sent the euro, and equity futures, surging before Tuesday’s open. In other news, economic data from Asia, Europe, and Canada did not disappoint. Inflation slowed in much of Europe while German unemployment fell, both healthy events for the troubled euro zone. However, not all the news was positive. Denmark’s economy entered a recession after GDP fell -0.5% in Q1. Denmark has now joined Portugal as the only other European nation to be in a recession. Elsewhere, Canada’s GDP expanded at a 3.9% annualized rate in the first quarter which was nearly double the US’s 1.8% rate but fell short of the 4% expected on the Street. In other news, the U.S. housing market officially is in a double-dip recession as home prices fell another -4.2% in Q1 after falling –3.6% in Q4 2010.
Market Outlook- Market In A Confirmed Rally
From our point of view, the market is back in a confirmed rally now that all the major averages are back above their respective 50 DMA lines and downward trendlines. Since the beginning of May, we have urged caution as the major averages and a host of commodities began selling off. However, the fact that the pullback was shallow and the market found support at its 50 DMA line in late May, suggests higher, not lower, prices lie ahead. The next level of resistance is the 2011 highs. If you are looking for specific help navigating this market, please contact us for more information.
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Disclaimer: All communication from ChartYourTrade is general in nature and for educational and general informational purposes only. Under no circumstance should it be considered personalized investment advice. All our work is general in nature and not specific to any one person. All the information on this site and/or that originates from us, or any of our partners or affiliates, is for educational and informational purposes only and is NOT a recommendation to buy or sell anything. To avoid any conflicts of interest, we do not have a working relationship with any of the companies mentioned in our work. Furthermore, we may have a long, short, or no position in any, or all, of the names that appear in our work and they may change at any time without notice. Investing and trading in capital markets or using margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you as well as for you. Before you decide to invest or trade in capital markets you should carefully consider your investment objectives, level of experience, and risk appetite, among other factors. The possibility exists that you could sustain a loss of some, all, or more of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with capital markets, investing/trading, and seek specific investment advice from an independent financial advisor and other professionals. Remember all the information we provide is for educational and general informational purposes only and is subject to change without notice.
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