Friday, February 19, 2010 Market Commentary- Week In Review: Stocks rallied on this shortened holiday week as investors digested a slew of economic and earnings news. On Tuesday, stocks rallied after the NY Fed released its Empire State Mfg index which topped the Street’s estimates. This was the fastest reading in four years and the first…
Looking at the market, the major averages continue to trade near their respective 50 DMA lines as they consolidate their recent move. Remember that as long as February 5th lows are not breached the window remains open for a new follow-through day (FTD) to emerge. A new follow-through day will confirm the current rally attempt and will be produced when one of the major averages rallies at least +1.7% on higher volume than the prior session as a new batch of leaders breakout of sound bases. However, if the February 5, 2010 lows are breached then the day count will be reset and a steeper correction may unfold.
Looking at the market, the major averages closed with modest gains on Wednesday as the major averages consolidate their recent move. As long as February 5th lows are not breached the window remains open for a new follow-through day (FTD) to emerge. A new follow-through day will confirm the current rally attempt and will be produced when one of the major averages rallies at least +1.7% on higher volume than the prior session as a new batch of leaders breakout of sound bases. However, if the February 5, 2010 lows are breached then the day count will be reset and a steeper correction may unfold.
It is also important to see how the major averages react to their respective 50-day moving average (DMA) lines which were support and are now acting as resistance. Until they all close above that important level the technical damage remaining on the charts is a concern. So far, the market’s reaction has been tepid at best to the latest round of economic and earnings data which remains a concern. Remember that the market remains in a correction until a new new follow-through day emerges. Until then, patience is paramount.
Tuesday, February 16, 2010 Market Commentary: The major averages ended higher after the latest round of stronger than expected economic and earnings data was released. Volume, a critical indicator of institutional sponsorship, was lower than the prior session on both exchanges which prevented the major averages from producing a sound follow-through day. Advancers trumped decliners by…