Stocks closed lower on Thursday as investors digested a slew of economic data. Thursday was the fifth consecutive session stocks closed near their lows which is not ideal. The benchmark S&P 500 index sliced below its 50 DMA line on Thursday but the Dow Jones Industrial Average and the tech heavy Nasdaq composite are still above their respective 50 DMA lines. Once all the major averages violate their respective 50 DMA lines, the rally will end and the bears will have regained control of this market. Looking forward, the next level of resistance is their respective 2011 highs.
Jobless Claims Top Estimates, PPI Is Tame, Bernanke Concludes Testimony, and Debt Talks Continue In D.C.:
On Thursday, investors digested a slew of economic data, most of which topped estimates. The Labor Department said, weekly jobless claims fell -22,000 to 405,000 last week which is much closer than to the closely followed 400,000 mark. The latest read on inflation was tame which helped ease pressure on the Fed to raise rates in the near future. The producer price index (PPI) fell -0.4% which was below the -0.3% forecast. Elsewhere, retail sales rose +0.1% which topped the unchanged reading expected by Wall Street. Bernanke spent most of his day testifying on Capital Hill where he made it clear that he was not immediately ready to embark on QE 3. Stocks immediately sold off on the news. The pressure in D.C. is palpable regarding the ongoing debt/deficit talks. The President knows that the country is at a critical juncture and if this issue is not resolved swiftly the ramifications will be ominous, it will tarnish his legacy, and most likely cost him a second term in office. After Thursday’s close, Google (GOOG) surged nearly 10% after smashing Q2 estimates which bodes well for Q2 earnings season.
Market Outlook- Uptrend Under Pressure:
The last week of June’s strong action suggests the market is back in a confirmed rally. As our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the current rally is under pressure as investors patiently await earnings season and continue to digest the latest economic data. Until all the major averages violate their respective 50 DMA lines on a closing basis, the market deserves the bullish benefit of the doubt. 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.
S&P 500 Violates 50 DMA Line!
Thursday, July 14, 2011
Stock Market Commentary:
Stocks closed lower on Thursday as investors digested a slew of economic data. Thursday was the fifth consecutive session stocks closed near their lows which is not ideal. The benchmark S&P 500 index sliced below its 50 DMA line on Thursday but the Dow Jones Industrial Average and the tech heavy Nasdaq composite are still above their respective 50 DMA lines. Once all the major averages violate their respective 50 DMA lines, the rally will end and the bears will have regained control of this market. Looking forward, the next level of resistance is their respective 2011 highs.
Jobless Claims Top Estimates, PPI Is Tame, Bernanke Concludes Testimony, and Debt Talks Continue In D.C.:
On Thursday, investors digested a slew of economic data, most of which topped estimates. The Labor Department said, weekly jobless claims fell -22,000 to 405,000 last week which is much closer than to the closely followed 400,000 mark. The latest read on inflation was tame which helped ease pressure on the Fed to raise rates in the near future. The producer price index (PPI) fell -0.4% which was below the -0.3% forecast. Elsewhere, retail sales rose +0.1% which topped the unchanged reading expected by Wall Street. Bernanke spent most of his day testifying on Capital Hill where he made it clear that he was not immediately ready to embark on QE 3. Stocks immediately sold off on the news. The pressure in D.C. is palpable regarding the ongoing debt/deficit talks. The President knows that the country is at a critical juncture and if this issue is not resolved swiftly the ramifications will be ominous, it will tarnish his legacy, and most likely cost him a second term in office. After Thursday’s close, Google (GOOG) surged nearly 10% after smashing Q2 estimates which bodes well for Q2 earnings season.
Market Outlook- Uptrend Under Pressure:
The last week of June’s strong action suggests the market is back in a confirmed rally. As our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the current rally is under pressure as investors patiently await earnings season and continue to digest the latest economic data. Until all the major averages violate their respective 50 DMA lines on a closing basis, the market deserves the bullish benefit of the doubt. 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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