Thursday, January, 14, 2010 Market Commentary: Stocks edged higher after weaker than expected economic data was released. Volume was reported slightly higher than the prior session’s totals on the NYSE and about even on the Nasdaq exchange, which suggested large institutions were buying stocks. Advancers led decliners by nearly a 11-to-8 ratio on the NYSE and by a 16-to-11 ratio on the…
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.
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.
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…