Stocks Bounce On A Busy Wednesday

ByAdam Sarhan

Stocks slid on Monday and Tuesday but the bulls showed up on Wednesday and quelled the bearish pressure. However, several leading stocks sold off hard, and negated their latest breakouts earlier in the week, which reiterates the importance of remaining selective as investors attempt to figure out how earnings season will unfold. It is important to note that the current 45-week rally remains intact as long as the major averages continue trading above their respective 50-day moving average (DMA) lines. Until those levels are breached, the bulls deserve the benefit of the doubt.

Earnings Season Begins; Stocks Fall

ByAdam Sarhan

On Monday, we penned, “After three strong weeks of gains, the market appears to be showing signs that a near-term pullback might be in the cards. A slew of stocks negatively reversed (opened higher and closed lower) on Monday, which suggests a change in trend may unfold.” Therefore, Tuesday’s pullback was somewhat expected as the major averages (and leading stocks) pause to consolidate their recent gains. Is the rally over? No, but all we have to do is be cognizant of the fact that a near term pullback may occur and then trade accordingly. From our point of view, the current, 45-week rally, remains intact as long as the major averages continue trading above their respective 50 DMA lines. Until those levels are breached, the bulls deserve the benefit of the doubt.

Earnings Season Begins; Stocks End Mixed

ByAdam Sarhan

Monday January 11, 2010 Market Commentary: The major averages closed mixed after China reported record imports and earnings season officially began. Volume, an important indicator of institutional sponsorship, was reported slightly lower than Friday’s totals on the NYSE and was about even to slightly higher on the Nasdaq exchange which indicated large institutions were not aggressively buying or…

Week 1 of 2010; Stocks Rally

ByAdam Sarhan

However, after all was said and done, stocks remain strong as investors digested the latest round of economic data. The benchmark S&P 500, Dow Jones Industrial Average, NYSE composite, mid-cap S&P 400, small-cap Russell 2000 and small-cap S&P 600 indices all enjoyed fresh recovery closing highs in the first week of 2010 and the tech heavy Nasdaq composite closed right near its respective high. The current rally just ended its 44th week (since the March 12, 2009 follow-through day) and on all accounts still looks very strong. In addition, most bull markets last for approximately 36 months, so the fact that we are beginning our 10th month suggests we have more room to go. Until support is broken (50 DMA lines for the major averages) this rally deserves the bullish benefit of the doubt.