Wednesday, April 28, 2010
Stock Market Commentary:
The major averages ended higher after the Federal Reserve held rates steady near historic lows and Spain’s debt was downgraded. Volume totals on Wednesday were reported lower compared to Tuesday’s totals which suggested large institutions were not aggressively buying stocks. Advancers led decliners by a 11-to-8 ratio on the NYSE and by a 14-to-13 ratio on both major exchanges. Meanwhile, new 52-week highs easily trumped new 52-week lows. There were 15 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, considerably lower than the 28 issues that appeared on the prior session. A healthy crop of new leaders making new highs bodes well for any market rally.
Next Domino To Fall: Spains’ Debt is Downgraded!
The euro slid to a fresh one year low after Spain’s debt rating was downgraded. This has been a tough week for the EU, Greece, Spain and Portugal all saw their debt ratings cut as the fear of default swells. Analysts are concerned that other European nations, (i.e. Ireland and Italy), may be next to see their ratings cut as the continent continues to make its way through the worst financial crisis since WWII!
The Fed Holds Rates Steady… Anyone Surprised!
Around 2pm EST, the Federal Reserve held rates steady and reiterated its stance to keep its benchmark interest rate near zero for an “extended period” as the economy continues to improve. The Fed said, “Economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.” Futures currently show that there is a 15% chance that the Fed will raise rates by their August meeting. In March, the odds were closer to 50%.
Market Action- Confirmed Rally:
It is important to note that the major averages have been steadily rallying since early February and a pullback of some sort should be expected. Tuesday marked the latest distribution day since the rally was confirmed on the March 1, 2010 follow-through day (FTD). According to the paper, there are 7 distribution days for the NYSE, 6 for the S&P 500, 5 for the Dow, and 3 for the Nasdaq. This puts some pressure on this 9-week rally, but has yet to cause any technical damage.
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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 Inch Higher As Fed Holds Rates Steady
Wednesday, April 28, 2010
Stock Market Commentary:
The major averages ended higher after the Federal Reserve held rates steady near historic lows and Spain’s debt was downgraded. Volume totals on Wednesday were reported lower compared to Tuesday’s totals which suggested large institutions were not aggressively buying stocks. Advancers led decliners by a 11-to-8 ratio on the NYSE and by a 14-to-13 ratio on both major exchanges. Meanwhile, new 52-week highs easily trumped new 52-week lows. There were 15 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, considerably lower than the 28 issues that appeared on the prior session. A healthy crop of new leaders making new highs bodes well for any market rally.
Next Domino To Fall: Spains’ Debt is Downgraded!
The euro slid to a fresh one year low after Spain’s debt rating was downgraded. This has been a tough week for the EU, Greece, Spain and Portugal all saw their debt ratings cut as the fear of default swells. Analysts are concerned that other European nations, (i.e. Ireland and Italy), may be next to see their ratings cut as the continent continues to make its way through the worst financial crisis since WWII!
The Fed Holds Rates Steady… Anyone Surprised!
Around 2pm EST, the Federal Reserve held rates steady and reiterated its stance to keep its benchmark interest rate near zero for an “extended period” as the economy continues to improve. The Fed said, “Economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.” Futures currently show that there is a 15% chance that the Fed will raise rates by their August meeting. In March, the odds were closer to 50%.
Market Action- Confirmed Rally:
It is important to note that the major averages have been steadily rallying since early February and a pullback of some sort should be expected. Tuesday marked the latest distribution day since the rally was confirmed on the March 1, 2010 follow-through day (FTD). According to the paper, there are 7 distribution days for the NYSE, 6 for the S&P 500, 5 for the Dow, and 3 for the Nasdaq. This puts some pressure on this 9-week rally, but has yet to cause any technical damage.
Professional Money Management Services- Free Portfolio Review:
Our skilled team of portfolio managers knows how to follow the rules of this fact-based investment system. If your portfolio is greater than $100,000 and you would like a free portfolio review, Click Here to get connected with one of our portfolio managers. ** Serious inquires only, please.
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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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