Day 3 Of A New Rally Attempt; Stocks Rally

Facebook
Twitter
LinkedIn

Tuesday, February 9, 2010
Market Commentary:

Stocks rallied, with emerging-market equities recovering from the worst three-day slide since the March ’09 lows, as the dollar pulled back to consolidate its recent move. A weaker dollar helped a slew of dollar denominated assets rally (mainly stocks and commodities) as the inverse relationship eased.

Greece May Not Default:

Overnight, the euro rallied on speculation that Greece will receive European aid to tackle its massive budget deficit. On February 11, EU leaders are scheduled to discuss Greece’s plans to reduce its massive budget deficit and many now believe that the EU will offer assistance. European Central Bank President, Jean-Claude Trichet, unexpectedly left a meeting in Sydney one day ahead of schedule and returned to Europe to discuss this issue. In related news, European Commission President  Jose Barroso supported the euro when he directly said that investors would be wrong to bet against it.

Market Action- In A Correction:

Looking at the market, Tuesday marked Day 3 of a new rally attempt which means that as long as last Friday’s lows are not breached this rally attempt remains intact.  The earliest a possible follow-through day (FTD) could emerge will be this Wednesday if the major averages rally at least +1.7% on higher volume than the prior session. However, if Friday’s 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. Remember that the recent series of distribution days coupled with the deleterious action in the major averages suggests large institutions are aggressively selling stocks. Disciplined investors will now wait for a new follow-through day to be produced before resuming any buying efforts. Until then, patience is paramount.

Professional Money Management Services – A Winning System – Inquire today!
Our skilled team of portfolio managers knows how to follow the rules of this fact-based investment system. We do not follow opinion or the “conviction list” of some large Wall Street institution which would have us fully invested even during horrific bear markets. Instead, we remain fluid and only buy the best stocks when they are triggering proper technical buy signals. If you are not completely satisfied with the way your portfolio is being managed, Click here to submit your inquiry.  *Accounts over $250,000 please.  ** Serious inquires only, please

Facebook
Twitter
LinkedIn

Here are more articles you may like

Claim Your Free Guide Today

Give us your email and we will give you the tools to change your life. 

FREE 7 DAY EMAIL COURSE

Learn about Early Entry Points & much more...

© 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