Stocks were smacked on Wednesday after durable goods and the Fed’s beige book failed to impress, the debt stalemate in D.C. continued, and the latest round of earnings data was not thrilling. It is a bit worrisome to see the Nasdaq 100 negate its latest breakout and pull back along side the other major averages. Technically, the current rally is under pressure as all the major averages are pulling back towards their respective 50 DMA lines. The Dow Jones Industrial Average & benchmark S&P 500 index sliced and closed below their respective 50 DMA line which is not a healthy sign. Looking forward, the next level of support are the 2011 lows/the 200 DMA lines and the next level of resistance are the 2011 highs.
Debt Deadline Approaches, Economic Data & Earnings Fail To Impress:
Stocks opened lower on Wednesday as the debt stalemate continued in D.C. and investors digested the latest round of tepid economic and mixed earnings data. On the economic front, durable goods orders slid -2.1% in June which was much lower than the Street’s forecast for a gain of +0.4%. A separate report from the Federal Reserve Bank of Chicago said manufacturing output in the Midwest region was weaker in June which does not bode well for the ongoing economic recovery. The Fed’s Beige Book showed that economic growth was moving forward at a very slow rate.
Earnings data was mixed as a slew of large cap stocks released their Q2 results. Shares of Cisco System’s (CSCO) and Juniper Networks (JNPR) both gapped down after releasing their Q2 results. Meanwhile, Amazon.com (AMZN) and Boeing (BA) rallied after reporting solid Q2 results. Elsewhere, the political stalemate continued in D.C. which led many to question whether or not the U.S.’ AAA credit rating may be cut by one of the popular rating agencies. Moreover, investors are concerned what the ramifications of such a cut would mean for the global financial system.
Market Outlook- Rally Under Pressure
The latest action in the major averages suggests the current rally is under pressure. Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the recent action suggests caution is paramount at this stage until all the major averages rally back towards their respective 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.
Stocks Smacked on Sour Debt, Economic, & Earnings Data
Wednesday, July 27, 2011
Stock Market Commentary:
Stocks were smacked on Wednesday after durable goods and the Fed’s beige book failed to impress, the debt stalemate in D.C. continued, and the latest round of earnings data was not thrilling. It is a bit worrisome to see the Nasdaq 100 negate its latest breakout and pull back along side the other major averages. Technically, the current rally is under pressure as all the major averages are pulling back towards their respective 50 DMA lines. The Dow Jones Industrial Average & benchmark S&P 500 index sliced and closed below their respective 50 DMA line which is not a healthy sign. Looking forward, the next level of support are the 2011 lows/the 200 DMA lines and the next level of resistance are the 2011 highs.
Debt Deadline Approaches, Economic Data & Earnings Fail To Impress:
Stocks opened lower on Wednesday as the debt stalemate continued in D.C. and investors digested the latest round of tepid economic and mixed earnings data. On the economic front, durable goods orders slid -2.1% in June which was much lower than the Street’s forecast for a gain of +0.4%. A separate report from the Federal Reserve Bank of Chicago said manufacturing output in the Midwest region was weaker in June which does not bode well for the ongoing economic recovery. The Fed’s Beige Book showed that economic growth was moving forward at a very slow rate.
Earnings data was mixed as a slew of large cap stocks released their Q2 results. Shares of Cisco System’s (CSCO) and Juniper Networks (JNPR) both gapped down after releasing their Q2 results. Meanwhile, Amazon.com (AMZN) and Boeing (BA) rallied after reporting solid Q2 results. Elsewhere, the political stalemate continued in D.C. which led many to question whether or not the U.S.’ AAA credit rating may be cut by one of the popular rating agencies. Moreover, investors are concerned what the ramifications of such a cut would mean for the global financial system.
Market Outlook- Rally Under Pressure
The latest action in the major averages suggests the current rally is under pressure. Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the recent action suggests caution is paramount at this stage until all the major averages rally back towards their respective 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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