The current rally was confirmed after all the major averages scored a proper follow-through day (FTD) on Tuesday. Volume totals were reported higher on the Nasdaq and the NYSE. Advancers led decliners by a 5-to-1 ratio on the NYSE and nearly a 4-to-1 ratio on the Nasdaq exchange. There were 37 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 31 issues that appeared on the prior session. New 52-week highs outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange.
Stocks Rally As Dollar Falls For 6th Consecutive Day:
The MSCI World Index advanced for a sixth consecutive day as the greenback continued its six day slide after a New York manufacturing report suggested the global economy remains strong. The Federal Reserve Bank of New York’s general economic index, which measures economic activity in the NY area, rose for an 11th consecutive month which helped offset European Debt woes. The weaker dollar helped a slew of dollar denominated assets (mainly stocks & commodities) rally. Elsewhere, oil jumped above $76 a barrel and the euro rose above $1.23.
Market Action- Confirmed Rally:
The Nasdaq composite, S&P 500, Dow Jones Industrial Average, and NYSE composite confirmed their latest rally attempt and produced a sound FTD which means the window is now open to begin buying high-ranked stocks again. Technically, it was encouraging to see the Dow Jones Industrial Average and the benchmark S&P 500 index close above their respective 200 DMA lines.
At this point, the S&P 500 is down -8.5% from its 19-month high of 1,219 and managed to close above resistance (200 DMA line) of its latest trading range. Looking forward, the 200 DMA line should now act as support as this market continues advancing. Remember to remain very selective because all the major averages are still trading below their downward sloping 50 DMA lines. It is important to note that approximately +75% of FTD’s lead to new sustained rallies, while +25% fail. In addition, every major rally in market history has begun with a FTD, but not every FTD leads to a new rally. Trade accordingly.
Host Of The #SmartMoneyCircle Podcast, Founder and CEO of 50 Park Investments. Adam provides weekly market updates to ChartYourTrade.com readers. He is a FORBES Contributor and is a frequent guest on all the major financial media outlets.
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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.
Stocks Score A FTD, New Rally Confirmed!
Tuesday, June 15, 2010
Stock Market Commentary:
The current rally was confirmed after all the major averages scored a proper follow-through day (FTD) on Tuesday. Volume totals were reported higher on the Nasdaq and the NYSE. Advancers led decliners by a 5-to-1 ratio on the NYSE and nearly a 4-to-1 ratio on the Nasdaq exchange. There were 37 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 31 issues that appeared on the prior session. New 52-week highs outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange.
Stocks Rally As Dollar Falls For 6th Consecutive Day:
The MSCI World Index advanced for a sixth consecutive day as the greenback continued its six day slide after a New York manufacturing report suggested the global economy remains strong. The Federal Reserve Bank of New York’s general economic index, which measures economic activity in the NY area, rose for an 11th consecutive month which helped offset European Debt woes. The weaker dollar helped a slew of dollar denominated assets (mainly stocks & commodities) rally. Elsewhere, oil jumped above $76 a barrel and the euro rose above $1.23.
Market Action- Confirmed Rally:
The Nasdaq composite, S&P 500, Dow Jones Industrial Average, and NYSE composite confirmed their latest rally attempt and produced a sound FTD which means the window is now open to begin buying high-ranked stocks again. Technically, it was encouraging to see the Dow Jones Industrial Average and the benchmark S&P 500 index close above their respective 200 DMA lines.
At this point, the S&P 500 is down -8.5% from its 19-month high of 1,219 and managed to close above resistance (200 DMA line) of its latest trading range. Looking forward, the 200 DMA line should now act as support as this market continues advancing. Remember to remain very selective because all the major averages are still trading below their downward sloping 50 DMA lines. It is important to note that approximately +75% of FTD’s lead to new sustained rallies, while +25% fail. In addition, every major rally in market history has begun with a FTD, but not every FTD leads to a new rally. Trade accordingly.
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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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