Wednesday, February 15, 2012 Stock Market Commentary:
Stocks and a slew of other risk assets were quiet on Wednesday as the latest round of mostly stronger than expected economic and earnings data was released. 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. It was also encouraging to see the S&P 500 break above its downward trendline and its longer term 200 DMA line. Looking forward, the S&P 500 has done a great job staying above its Q4 2011 high (~1292) and is flirting with 1356 which corresponds with July’s high. The next level of resistance is 2011’s high just above 1370. The bulls remain in control as long as the benchmark S&P 500 trades above 1292 and then its 200 DMA line.
FOMC Minutes Released, Home Builder Confidence, France & Germany’s GDP, and Empire State MFG survey Beat Estimates:
Stocks were relatively quiet on Wednesday even though futures were pointing to a stronger open. The economic data topped estimates. The National Association of Home Builder’s said its monthly sentiment index rose 4 points to 29, which was its highest reading in four years. Even though the report is trending higher, it is still below the critical 50 level which separates outright positive and negative sentiment. The Empire State survey, which measures manufacturing in the state of New York, topped estimates and rose to 19.53 in February which is another bullish feather in the economy’s cap. The minutes of the latest FOMC meeting were released and largely reiterated their recent publicly stated stance of cautious optimism. Finally, France and Germany’s gross domestic product (GDP) beat estimates. Germany’s GDP, Europe’s largest economy, fell by -0.2% which beat the -0.3% estimate. Meanwhile, France’s GDP, Europe’s second largest economy, rose by +0.2% which matched estimates.
Market Outlook- New Rally Confirmed
Nearly all risk assets are extended by any normal measure and are due for a pullback to consolidate their recent gains. The key is to ascertain the “health” of the pullback to see if it is a short pause in a new uptrend or the beginning of a new downtrend. Risk assets (stocks, FX, and commodities) have been acting better since the latter half of December. Now that the major U.S. averages scored a proper follow-through day the path of least resistance is higher. Looking forward, one can err on the long side as long as the benchmark S&P 500 remains above support (1292). Leadership is beginning to improve which is another healthy sign. Now that the 200 DMA line was taken out it will be important to see how long the market can stay above this important level. 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!
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 Quiet On Healthy Economic Data
Wednesday, February 15, 2012
Stock Market Commentary:
Stocks and a slew of other risk assets were quiet on Wednesday as the latest round of mostly stronger than expected economic and earnings data was released. 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. It was also encouraging to see the S&P 500 break above its downward trendline and its longer term 200 DMA line. Looking forward, the S&P 500 has done a great job staying above its Q4 2011 high (~1292) and is flirting with 1356 which corresponds with July’s high. The next level of resistance is 2011’s high just above 1370. The bulls remain in control as long as the benchmark S&P 500 trades above 1292 and then its 200 DMA line.
FOMC Minutes Released, Home Builder Confidence, France & Germany’s GDP, and Empire State MFG survey Beat Estimates:
Stocks were relatively quiet on Wednesday even though futures were pointing to a stronger open. The economic data topped estimates. The National Association of Home Builder’s said its monthly sentiment index rose 4 points to 29, which was its highest reading in four years. Even though the report is trending higher, it is still below the critical 50 level which separates outright positive and negative sentiment. The Empire State survey, which measures manufacturing in the state of New York, topped estimates and rose to 19.53 in February which is another bullish feather in the economy’s cap. The minutes of the latest FOMC meeting were released and largely reiterated their recent publicly stated stance of cautious optimism. Finally, France and Germany’s gross domestic product (GDP) beat estimates. Germany’s GDP, Europe’s largest economy, fell by -0.2% which beat the -0.3% estimate. Meanwhile, France’s GDP, Europe’s second largest economy, rose by +0.2% which matched estimates.
Market Outlook- New Rally Confirmed
Nearly all risk assets are extended by any normal measure and are due for a pullback to consolidate their recent gains. The key is to ascertain the “health” of the pullback to see if it is a short pause in a new uptrend or the beginning of a new downtrend. Risk assets (stocks, FX, and commodities) have been acting better since the latter half of December. Now that the major U.S. averages scored a proper follow-through day the path of least resistance is higher. Looking forward, one can err on the long side as long as the benchmark S&P 500 remains above support (1292). Leadership is beginning to improve which is another healthy sign. Now that the 200 DMA line was taken out it will be important to see how long the market can stay above this important level. 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!
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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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