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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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EU Debt Woes Sends Euro Plunging
Tuesday, November 30, 2010
Stock Market Commentary:
The euro sliced below its 200 DMA line and its psychologically important level of 1.30 this week as concern spread that their debt woes will spread. The rally which began on the September 1, 2010 follow-through day ended on Tuesday. November 16, 2010 as stocks and commodities plunged in heavy trade. All the major averages took out their latest rally attempt’s lows which means the day count was reset, except for the Nasdaq composite.
Shanghai Index Tumbles To 7-Week Low:
The euro plunged to a fresh multi month low and traded below its 200 DMA line as concern spread that EU’s debt woes will spread. The US dollar rallied on the news which sent a host of dollar denominated assets (i.e. stocks and commodities) sharply lower. Overnight, China’s Shanghai Index shed -3.1% and tumbled to a fresh 7-week low after a shortfall of cash in the domestic money market caused a liquidity squeeze. It is also important to note that the Shanghai index violated its 50 DMA line in mid-November which bodes poorly for other global equity markets.
US Economic Data Is Mixed:
Before Tuesday’s open, the Case-Shiller Home price index fell faster than expected. The report showed that prices of single-family homes in September slid 2x more than forecast. Elsewhere, the ISM released its Chicago based business barometer which topped estimates and rose to +62.5 this month. This was the highest reading since April and topped October’s reading of 60.6. Finally, consumer confidence jumped to the highest level since June which bodes well for the holiday shopping season. The Conference Board said its index of consumer sentiment rose to 54.1 in November which is the strongest reading since June and topped October’s reading of 49.9.
Market Action- Week 3 In A Correction:
The Dow Jones Industrial Average, S&P 500, and the NYSE composite sliced below their respective 50 DMA lines this week which is not a healthy sign. However, it was encouraging to see the bulls show up and defend that important level. The 12-week rally ended on Tuesday, November 16, 2010 after the major averages plunged in heavy volume back down towards their respective 50 DMA lines. In recent weeks, we have repeatedly written about how the major averages were experiencing wide-and-loose action after a big move and made it very clear that that was not a healthy sign. At this point, we are looking for a new rally to be confirmed with a new follow-through day before taking any new positions. Caution and patience are key at this point. The tech-heavy Nasdaq composite remains the strongest index as it remains well above its 50 DMA line. Trade accordingly.
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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