Thursday, January 19, 2012 Stock Market Commentary:
Stocks and a slew of other risk assets rallied on Thursday, led higher but stronger than expected economic and earnings data. 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 market is doing its best to make its way above Q4 2011’s high (~1292) and now has its sights set on its 2011 highs near 1370. In addition, the bulls remain in control as long as the benchmark S&P 500 trades above its 200 DMA line.
Euro Rallies, Earnings & Economic Data Help Stocks
On Thursday, stocks and a host of other risk assets rallied after the Euro continued its week-long charge higher and investors digested the latest round of economic and earnings data. Before Thursday’s open, Bank of America (BAC) met estimates while investment bank Morgan Stanley (MS) missed. However, both stocks opened higher which helped the rest of the market rally. Another beaten down sector of 2011 that has been on a tear of late is the housing stocks. Due to the recent action in housing stocks we are of the belief that a significant low may be developing.
The news on the economic front was mostly positive. Weekly jobless claims plunged last week which bodes well for the broader economy and the ailing jobs market. The Labor Department said weekly jobless claims tanked by 50,000 to 352,000 which was the lowest reading since April 2008. Moreover, the four-week average, which is used to give smoother readings, plunged to 379,000 which is the second-lowest reading in more than 3 years. The Commerce Department said housing starts slid -4.1% to a seasonally adjusted annual rate of 657,000 units. Finally, the consumer price index (CPI) was unchanged last month which helped allay inflation woes. This was the second consecutive monthly decline for the headline number while core prices (which exclude food and energy) edged up +0.1%.
Market Outlook- New Rally Confirmed
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 (1260). 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.
Earnings & Economic Data Help Stocks
Thursday, January 19, 2012
Stock Market Commentary:
Stocks and a slew of other risk assets rallied on Thursday, led higher but stronger than expected economic and earnings data. 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 market is doing its best to make its way above Q4 2011’s high (~1292) and now has its sights set on its 2011 highs near 1370. In addition, the bulls remain in control as long as the benchmark S&P 500 trades above its 200 DMA line.
Euro Rallies, Earnings & Economic Data Help Stocks
On Thursday, stocks and a host of other risk assets rallied after the Euro continued its week-long charge higher and investors digested the latest round of economic and earnings data. Before Thursday’s open, Bank of America (BAC) met estimates while investment bank Morgan Stanley (MS) missed. However, both stocks opened higher which helped the rest of the market rally. Another beaten down sector of 2011 that has been on a tear of late is the housing stocks. Due to the recent action in housing stocks we are of the belief that a significant low may be developing.
The news on the economic front was mostly positive. Weekly jobless claims plunged last week which bodes well for the broader economy and the ailing jobs market. The Labor Department said weekly jobless claims tanked by 50,000 to 352,000 which was the lowest reading since April 2008. Moreover, the four-week average, which is used to give smoother readings, plunged to 379,000 which is the second-lowest reading in more than 3 years. The Commerce Department said housing starts slid -4.1% to a seasonally adjusted annual rate of 657,000 units. Finally, the consumer price index (CPI) was unchanged last month which helped allay inflation woes. This was the second consecutive monthly decline for the headline number while core prices (which exclude food and energy) edged up +0.1%.
Market Outlook- New Rally Confirmed
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 (1260). 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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