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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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Bulls Defend Support
Thursday, February 10, 2011
Stock Market Commentary:
Stocks opened lower after the Bank of England held rates steady and a handful of earnings disappointed. However, the bulls quickly showed up, defended support, and quelled the bearish pressure which is positive sign. It is encouraging to see leading stocks and the major averages continue to respond well to the recent slew of stronger-than-expected earnings that have been released. The fact that the major averages bounced back sharply after a very brief pullback illustrates how strong this 24-week rally actually is.
Bank of England Holds Rates Steady; Earnings Disappoint:
Aftern Wednesday’s close, Cisco Inc. (CSCO) reported another disappointing quarter and slid in after hours trade. The stock, which is a large component of the Nasdaq 100, dragged futures lower which set the stage for a weak open on Thursday. Before Thursday’s open, Pepsico (PEP), the world’s second largest soft drink manufacturer, said earnings topped estimates but lowered guidance due to higher commodity prices. This put pressure on shares because investors tend to focus on where a stock is going, not where it has been. Elsewhere, weekly jobless claims fell to the lowest level since 2008 which was a welcomed sign for the ailing jobs market.
Overseas, the Bank of England decided to hold interest rates steady at a record low of 0.5% for another month Thursday, even though the likelihood that the annual inflation rate will rise to more than double the bank’s target in the near future. The BOE’s target inflation rate is 2% which is inline with historical data.
Market Action- Confirmed Rally; Week 24
It was encouraging to see the bulls show up and defend the major averages’ respective 50 DMA lines in November as this market proves resilient and simply refuses to go down. From our point of view, the market remains in a confirmed rally until those levels are breached. The tech-heavy Nasdaq composite and small-cap Russell 2000 indexes continue to lead evidenced by their shallow correction and strong recovery. However, it is important to note that stocks are a bit extended here and a pullback of some sort (back to the 50 DMA lines) would do wonders to restore the health of this bull market. If you are looking for specific high ranked ideas, please contact us for more information.
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© ChartYourTrade | Contact us: website@chartyourtrade.com
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.
Charts and Data are courtesy of MarketSmith Incorporated. Join MarketSmith here.
Terms of Service