Wednesday, August 11, 2010
Stock Market Commentary:
The major averages got smacked on Wednesday after a weaker than expected manufacturing report was released from China and the US trade gap widened. Volume totals were reported higher on the NYSE and on the Nasdaq exchanges versus the prior session, which marked a second consecutive distribution day for the major averages. Decliners trumped advancers by over a 5-to-1 ratio on the NYSE and by over an 8-to-1 ratio on the Nasdaq exchange. New 52-week highs easily outnumbered new 52-week lows on the NYSE but trailed new lows on the Nasdaq exchange. There were only 2 high-ranked companies from the CANSLIM.net Leaders List made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, down sharply from the 24 issues that appeared on the prior session.
China’s Economy Slows; Dollar Soars!
Stocks fell in Asia and Europea after China released a weaker than expected manufacturing report. This led many to question whether or not China’s strong economy will be able to offset weakness in other areas of the global recovery. On Tuesday, China said imports fell short of the Street’s lofty expectations which also put pressure on the global recovery theme. In the US, the trade deficit unexpectedly grew in June to the highest level since October 2008. The report showed that consumer goods imports rose to a record level and exports fell. Fears of a global economic slowdown sent the US dollar soaring which also put pressure on a slew of dollar denominated assets (mainly stocks and commodities).
Market Action- Uptrend Under Pressure
The technical action in the major averages has deteriorated significantly now that all the major averages failed to close above their recent chart highs (resistance) and sliced below their respective 200 DMA lines. It is also worrisome to see the number of distribution days pile up in recent weeks which puts pressure on the current five-week rally. In order for a new leg higher to begin, all the major averages must close and remain above their respective resistance levels. 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 Get Smacked As Dollar Soars!
Wednesday, August 11, 2010
Stock Market Commentary:
The major averages got smacked on Wednesday after a weaker than expected manufacturing report was released from China and the US trade gap widened. Volume totals were reported higher on the NYSE and on the Nasdaq exchanges versus the prior session, which marked a second consecutive distribution day for the major averages. Decliners trumped advancers by over a 5-to-1 ratio on the NYSE and by over an 8-to-1 ratio on the Nasdaq exchange. New 52-week highs easily outnumbered new 52-week lows on the NYSE but trailed new lows on the Nasdaq exchange. There were only 2 high-ranked companies from the CANSLIM.net Leaders List made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, down sharply from the 24 issues that appeared on the prior session.
China’s Economy Slows; Dollar Soars!
Stocks fell in Asia and Europea after China released a weaker than expected manufacturing report. This led many to question whether or not China’s strong economy will be able to offset weakness in other areas of the global recovery. On Tuesday, China said imports fell short of the Street’s lofty expectations which also put pressure on the global recovery theme. In the US, the trade deficit unexpectedly grew in June to the highest level since October 2008. The report showed that consumer goods imports rose to a record level and exports fell. Fears of a global economic slowdown sent the US dollar soaring which also put pressure on a slew of dollar denominated assets (mainly stocks and commodities).
Market Action- Uptrend Under Pressure
The technical action in the major averages has deteriorated significantly now that all the major averages failed to close above their recent chart highs (resistance) and sliced below their respective 200 DMA lines. It is also worrisome to see the number of distribution days pile up in recent weeks which puts pressure on the current five-week rally. In order for a new leg higher to begin, all the major averages must close and remain above their respective resistance levels. 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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