The major averages rallied smartly on Monday which sent the benchmark S&P 500 Index above resistance and to a fresh 2009 high! Volume, a critical component of institutional demand, was higher than Friday’s levels on both major exchanges; which signaled large institutions were accumulating stocks. Advancers trumped decliners by over a 4-to-1 ratio on the NYSE and by over a 3-to-1 ratio on the Nasdaq exchange. It was encouraging to see new 52-week highs outnumber new 52-week lows on the NYSE and Nasdaq exchange.
Asia Continues To Help!
Stocks rallied across the globe as the US dollar fell after Asian governments reaffirmed their economic stimulus packages. The 21-member Asia-Pacific Economic Cooperation group, which currently comprises over half of the global economy (approximately +54%), announced that they will maintain their massive economic stimulus packages well into 2010. The greenback fell to a fresh 15-month low which sent a host of dollar denominated assets higher: mainly stocks and commodities. The Dollar Index, which measures how the dollar performs against six other currencies, fell to 74.820 and touched 74.679 which was the lowest level since August 2008. The Reuters/Jefferies CRB Index of 19 raw materials jumped 2.9% which was its largest single day advance since August! The weaker dollar helped send gold to another record high which lifted a slew of gold stocks in its wake.
Economic News:
Turning to the economic front, the US government said retail sales grew +1.4% in October. A slew of retailers jumped on the news as investors bet the forthcoming holiday season will top estimates. Several of the country’s largest credit card issuers rallied after reporting charge backs (i.e. bad loans) fell for a sixth straight month. American Express Co. (AXP) jumped to a fresh 2009 high as volume swelled. This was another stronger-than-expected economic data point which suggests the economic recovery is in full force. Elsewhere, Federal Reserve Chairman Ben Bernanke gave a speech to the Economic Club in New York and said economic “headwinds” remain in the economy. He also said that, “Significant economic challenges remain… The flow of credit remains constrained, economic activity weak and unemployment much too high. Future setbacks are possible.” He also noted that we are in a much better place in Q4 2009 vs Q4 2008. It is important to note that the S&P 500 has rebounded +64% from its 12-year low in March which is a very impressive feat! Turning to the market, leadership remains very thin which only reiterates Jesse Livermore’s advice; Follow The Leaders!
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 & Commodities Rally; Dollar Falls
Stocks and Commodities Rally; Dollar Falls
The major averages rallied smartly on Monday which sent the benchmark S&P 500 Index above resistance and to a fresh 2009 high! Volume, a critical component of institutional demand, was higher than Friday’s levels on both major exchanges; which signaled large institutions were accumulating stocks. Advancers trumped decliners by over a 4-to-1 ratio on the NYSE and by over a 3-to-1 ratio on the Nasdaq exchange. It was encouraging to see new 52-week highs outnumber new 52-week lows on the NYSE and Nasdaq exchange.
Asia Continues To Help!
Stocks rallied across the globe as the US dollar fell after Asian governments reaffirmed their economic stimulus packages. The 21-member Asia-Pacific Economic Cooperation group, which currently comprises over half of the global economy (approximately +54%), announced that they will maintain their massive economic stimulus packages well into 2010. The greenback fell to a fresh 15-month low which sent a host of dollar denominated assets higher: mainly stocks and commodities. The Dollar Index, which measures how the dollar performs against six other currencies, fell to 74.820 and touched 74.679 which was the lowest level since August 2008. The Reuters/Jefferies CRB Index of 19 raw materials jumped 2.9% which was its largest single day advance since August! The weaker dollar helped send gold to another record high which lifted a slew of gold stocks in its wake.
Economic News:
Turning to the economic front, the US government said retail sales grew +1.4% in October. A slew of retailers jumped on the news as investors bet the forthcoming holiday season will top estimates. Several of the country’s largest credit card issuers rallied after reporting charge backs (i.e. bad loans) fell for a sixth straight month. American Express Co. (AXP) jumped to a fresh 2009 high as volume swelled. This was another stronger-than-expected economic data point which suggests the economic recovery is in full force. Elsewhere, Federal Reserve Chairman Ben Bernanke gave a speech to the Economic Club in New York and said economic “headwinds” remain in the economy. He also said that, “Significant economic challenges remain… The flow of credit remains constrained, economic activity weak and unemployment much too high. Future setbacks are possible.” He also noted that we are in a much better place in Q4 2009 vs Q4 2008. It is important to note that the S&P 500 has rebounded +64% from its 12-year low in March which is a very impressive feat! Turning to the market, leadership remains very thin which only reiterates Jesse Livermore’s advice; Follow The Leaders!
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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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