Tuesday, January 25, 2011
Stock Market Commentary:
The major averages opened lower but closed higher after the latest round of economic and earnings data was released. The current 22-week rally remains under pressure after the major averages negatively reversed from a new recovery high and closed lower on Wednesday January 19, 2011. This ominous action, especially after a big move and from a new high, suggests a subtle change in trend may be on the horizon. We are shifting our stance from capital appreciation mode; to capital preservation (i.e. we are locking in gains and tightening stops to protect from further downside deterioration).
Earnings & Economic Data:
The housing sector continues to struggle according to the latest Case-Shiller home price index. The closely watched index fell -0.08% in November which suggests home prices are continuing to fall as supply remains elevated and demand suppressed. Elsewhere, consumer confidence rose in January led by a big improvement in the ailing jobs market. The Conference Board’s index of consumer confidence rose more than 7 points in January to 60.6. President Obama will give his State of the Union address Tuesday evening and the Federal Reserve will conclude its first meeting of 2011 on Wednesday afternoon. In addition, there are a slew of earnings that will be released this week. Needless to say, it will be an interesting week. So far, it is encouraging to see the major averages edge higher.
Market Action- Market In Confirmed Rally; Week 22
It was encouraging to see the bulls show up in November and defend the major averages’ respective 50 DMA lines. The market remains in a confirmed rally until those levels are breached. The tech-heavy Nasdaq composite and small-cap Russell 2000 indexes continue to lead evidenced by their shallow correction and strong recovery. However, it is important to note that stocks are a bit extended here and a pullback of some sort (back to the 50 DMA lines) would do wonders to restore the health of this bull market. If you are looking for specific high ranked ideas, 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.
Stocks Rally Ahead of State of The Union Speech
Tuesday, January 25, 2011
Stock Market Commentary:
The major averages opened lower but closed higher after the latest round of economic and earnings data was released. The current 22-week rally remains under pressure after the major averages negatively reversed from a new recovery high and closed lower on Wednesday January 19, 2011. This ominous action, especially after a big move and from a new high, suggests a subtle change in trend may be on the horizon. We are shifting our stance from capital appreciation mode; to capital preservation (i.e. we are locking in gains and tightening stops to protect from further downside deterioration).
Earnings & Economic Data:
The housing sector continues to struggle according to the latest Case-Shiller home price index. The closely watched index fell -0.08% in November which suggests home prices are continuing to fall as supply remains elevated and demand suppressed. Elsewhere, consumer confidence rose in January led by a big improvement in the ailing jobs market. The Conference Board’s index of consumer confidence rose more than 7 points in January to 60.6. President Obama will give his State of the Union address Tuesday evening and the Federal Reserve will conclude its first meeting of 2011 on Wednesday afternoon. In addition, there are a slew of earnings that will be released this week. Needless to say, it will be an interesting week. So far, it is encouraging to see the major averages edge higher.
Market Action- Market In Confirmed Rally; Week 22
It was encouraging to see the bulls show up in November and defend the major averages’ respective 50 DMA lines. The market remains in a confirmed rally until those levels are breached. The tech-heavy Nasdaq composite and small-cap Russell 2000 indexes continue to lead evidenced by their shallow correction and strong recovery. However, it is important to note that stocks are a bit extended here and a pullback of some sort (back to the 50 DMA lines) would do wonders to restore the health of this bull market. If you are looking for specific high ranked ideas, 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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