Mixed Economic Data Weighs On Stocks


Tuesday, July 27, 2010
Stock Market Commentary:

The major averages traded between positive and negative territory after the latest round of earnings and mixed economic data was released. Volume, an important indicator of institutional sponsorship, was reported mixed, higher on the NYSE and lower on the Nasdaq exchange. Decliners led advancers by a 22-to-17 ratio on the NYSE and by a 15-to-11 ratio on the Nasdaq exchange. New 52-week highs easily outnumbered new 52-week lows on both major exchanges. There were 59 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, lower from the 64 issues that appeared on the prior session.  The sign of expanding leadership bodes well for the current confirmed rally.

Earnings & Mixed Economic Data Weigh On Stocks:

The major averages opened higher after DuPont (DD +3.57%) and Deutsche Bank (DB +2.84%) reported solid Q2 results.  However, the bears showed up and sent the major averages into the red after the latest round of mixed economic data was released. The S&P Case-Shiller home-price index showed home prices across the US rose in May due to “seasonal factors and the residual impact of the now-expired first-time home buyers’ tax credit.” The Case-Shiller 20-city index rose +1.3% compared to April’s reading and it rose +0.5% when adjusted for seasonal factors. It was somewhat encouraging to see the index rise +4.6% when compared to the same period last year. Elsewhere, consumer confidence plunged to a five-month low and the latest reading on US manufacturing fell short of the Street’s estimates which led many to question the health of the ongoing economic recovery.

Market Action- Confirmed Rally:

It is encouraging to see the major averages hold on to their gains after breaking above their 2-month downward trendlines and their respective 50 & 200 day moving average (DMA) lines in recent sessions. It is also healthly to see a new batch of high ranked stocks breakout of fresh bases as this rally gains steam. At this point, the window remains open for high ranked stocks to be accumulated when they trigger fresh technical buy signals. If you are interested in learning more, feel free to contact us for a full list of high ranked candidates. Trade accordingly.

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