Stocks rallied on Thursday after EU leaders announced a new bailout for their debt stricken nations. Technically, it is encouraging to see the major average find support and bounce off their respective 50 DMA lines this week. It is also encouraging to see the major averages on track for a positive reversal (open lower and close higher) for the week. Looking forward, the next level of support are the 2011 lows/the 200 DMA lines and the next level of resistance are the 2011 highs.
New EU Bailout Plan, Economic Data Helps Stocks, & Earnings Continue in Droves
Before Thursday’s open, the euro rallied smartly after Euro-zone leaders proposed a new aid package for Greece and restructured their closely followed rescue fund. The changes are designed to reduce the debt burdens of Greece, Portugal and Ireland and allow the European Financial Stability Facility (EFSF) to charge rates as low as 3.5%. The plan also extends the average maturity of the loans to 7.5-15 years.
In the U.S., the Labor Department said weekly jobless claims rose 10,000 to 418,000 which topped the Street’s estimate for 410,000. The data showed nearly 1,750 additional job cuts due to the Minnesota government shutdown. Stocks added to gains after Leading economic indicators in the U.S. and the Philly Fed survey rose +0.3. The major averages are on track to hit fresh 2011 highs which is a very healthy sign. The latest round of earnings data topped estimates which is another encouraging sign for the market.
Market Outlook- Confirmed Rally
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 recent action suggests the rally is back in a confirmed rally as all the major averages are now flirting with fresh 2011 highs. 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.
Stocks Rally On New EU Bailout!
Thursday, July 21, 2011
Stock Market Commentary:
Stocks rallied on Thursday after EU leaders announced a new bailout for their debt stricken nations. Technically, it is encouraging to see the major average find support and bounce off their respective 50 DMA lines this week. It is also encouraging to see the major averages on track for a positive reversal (open lower and close higher) for the week. Looking forward, the next level of support are the 2011 lows/the 200 DMA lines and the next level of resistance are the 2011 highs.
New EU Bailout Plan, Economic Data Helps Stocks, & Earnings Continue in Droves
Before Thursday’s open, the euro rallied smartly after Euro-zone leaders proposed a new aid package for Greece and restructured their closely followed rescue fund. The changes are designed to reduce the debt burdens of Greece, Portugal and Ireland and allow the European Financial Stability Facility (EFSF) to charge rates as low as 3.5%. The plan also extends the average maturity of the loans to 7.5-15 years.
In the U.S., the Labor Department said weekly jobless claims rose 10,000 to 418,000 which topped the Street’s estimate for 410,000. The data showed nearly 1,750 additional job cuts due to the Minnesota government shutdown. Stocks added to gains after Leading economic indicators in the U.S. and the Philly Fed survey rose +0.3. The major averages are on track to hit fresh 2011 highs which is a very healthy sign. The latest round of earnings data topped estimates which is another encouraging sign for the market.
Market Outlook- Confirmed Rally
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 recent action suggests the rally is back in a confirmed rally as all the major averages are now flirting with fresh 2011 highs. 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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