Stocks opened higher as first quarter earnings season officially began and crude oil fell over -3% after Libyan dictator Qaddafi was rumored to have accepted a peace treaty. It is encouraging to see a slew of leading stocks and the benchmark S&P 500, Dow Jones Industrial Average, Nasdaq composite, and small cap Russell 2000 index all close and stay above their respective 50 DMA lines since late March. The 28-week rally, which began on the September 1, 2010 follow-through day (FTD), ended on Thursday March 10, 2011 when all the major U.S. averages plunged below their respective 50 DMA lines in heavy trade. However, the correction was short lived when a new rally was confirmed on Thursday March 24, 2011′s healthy action. Since then, the action remains healthy which suggests the bulls are back in control of this market.
Oil Down & Earnings Season Begins:
Over the weekend, rumors spread that Libyan dictator Qaddafi accepted a peace treaty that would end the two-month civil war that has crippled the North African country. Surging energy prices are perhaps the largest threat to the ongoing economic recovery. WTI crude oil hit a 2.5 year high last week when it vaulted above $113/barrel. The last time oil surged that high was in the summer of 2008 which directly preceded the fall of Lehman Brothers and the Great Recession. It is important to remain cognizant of the fact that high energy prices acts as an indirect tax on both consumers and businesses which is a bane for the global recovery. Therefore, it is imperative to closely monitor the sensitive relationship between oil and stocks. In other news, Q1 earnings season has officially begun which will likely dictate the near term action for the major averages. Remember, for an objective view of Q1 earnings, we tend to focus on how the major averages and individual stocks react to the numbers and not just the earnings themselves.
Market Action- Rally Under Pressure
The current rally which began with the Thursday, March 24, 2011 FTD is now under pressure as the Nasdaq 100 sliced below its respective 50 DMA lines. Remaining objective, it is bullish to see the other popular averages all trading above their respective 50 DMA lines. However, if that important level is breached, then lower, not higher prices, likely lie ahead. If you are looking for specific help navigating this market, please contact us for more information.
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.
Q1 Earning Season Begins!
Monday, April 11, 2011
Stock Market Commentary:
Stocks opened higher as first quarter earnings season officially began and crude oil fell over -3% after Libyan dictator Qaddafi was rumored to have accepted a peace treaty. It is encouraging to see a slew of leading stocks and the benchmark S&P 500, Dow Jones Industrial Average, Nasdaq composite, and small cap Russell 2000 index all close and stay above their respective 50 DMA lines since late March. The 28-week rally, which began on the September 1, 2010 follow-through day (FTD), ended on Thursday March 10, 2011 when all the major U.S. averages plunged below their respective 50 DMA lines in heavy trade. However, the correction was short lived when a new rally was confirmed on Thursday March 24, 2011′s healthy action. Since then, the action remains healthy which suggests the bulls are back in control of this market.
Oil Down & Earnings Season Begins:
Over the weekend, rumors spread that Libyan dictator Qaddafi accepted a peace treaty that would end the two-month civil war that has crippled the North African country. Surging energy prices are perhaps the largest threat to the ongoing economic recovery. WTI crude oil hit a 2.5 year high last week when it vaulted above $113/barrel. The last time oil surged that high was in the summer of 2008 which directly preceded the fall of Lehman Brothers and the Great Recession. It is important to remain cognizant of the fact that high energy prices acts as an indirect tax on both consumers and businesses which is a bane for the global recovery. Therefore, it is imperative to closely monitor the sensitive relationship between oil and stocks. In other news, Q1 earnings season has officially begun which will likely dictate the near term action for the major averages. Remember, for an objective view of Q1 earnings, we tend to focus on how the major averages and individual stocks react to the numbers and not just the earnings themselves.
Market Action- Rally Under Pressure
The current rally which began with the Thursday, March 24, 2011 FTD is now under pressure as the Nasdaq 100 sliced below its respective 50 DMA lines. Remaining objective, it is bullish to see the other popular averages all trading above their respective 50 DMA lines. However, if that important level is breached, then lower, not higher prices, likely lie ahead. If you are looking for specific help navigating this market, please contact us for more information.
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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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