Stocks soared in October and enjoyed one of their strongest monthly gains in ages! Stocks opened October lower but bottomed on October 4, 2011 (the same day the Fed began operation twist) and spent the next three weeks enjoying monstrous gains in anticipation of a Greek haircut. At the end of October, European leaders finally were able to make a deal regarding Greece’s onerous debt levels and agreed to leverage their bailout plan 4 to 5 times in order to handle other debt laden states. The S&P 500 (SPX) is fractionally lower for 2011 while the Nasdaq composite and Dow Jones Industrial Average (DJIA) are modestly higher. Stocks confirmed their latest rally attempt on Tuesday (10.18.11) day 12 of their rally attempt when the SPX and NYSE composite scored proper follow-through days (FTD). It is important to note that every major rally in history began with a FTD but not every FTD leads to a new rally. That said, one can err on the bullish side as long as the major averages remain above their 50 DMA lines.
Stocks End October On A Low Note, Bank of Japan Intervenes To Curb Yen
Risk assets fell on Monday after the Bank of Japan intervened in the currency market to curb their red-hot yen ahead of the G-20 meeting later this week. October will go down in history as the best month for the DJIA since 2002 and the best month for the benchmark SPX since 1991! From the 10/4 low-10/31’s close: SPX jumped +16.6%, NDX +15.5%, DJIA +15%, & R2K (RUT) vaulted +23.15%!
At this point, the market is clearly extended to the upside and due for a pullback. They key is to ascertain the health and duration of the pullback to see if it is an orderly (i.e. normal) pullback or something more severe. With this market and the VIX near 30, anything is possible. From our point of view, the bulls remain in control as long as the SPX stays above the middle of its bullish double bottom pattern; 1230.
Market Outlook- Confirmed Rally:
The major U.S. averages are back in a new confirmed rally and broke above the mid-point/resistance of their 6-week bullish double bottom base. The benchmark S&P 500 index scored a proper FTD on Tuesday, October 18, 2011, i.e. Day 12, when it rallied over 2% on heavier volume than the prior session. In addition, it is important to note that the bulls scored a victory since many of the major averages closed above their downward sloping 50 DMA lines for the first time since late July! Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. 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 Slide As Record Month Ends; SP 500 Down For Yr!
Monday, October 31, 2011
Stock Market Commentary:
Stocks soared in October and enjoyed one of their strongest monthly gains in ages! Stocks opened October lower but bottomed on October 4, 2011 (the same day the Fed began operation twist) and spent the next three weeks enjoying monstrous gains in anticipation of a Greek haircut. At the end of October, European leaders finally were able to make a deal regarding Greece’s onerous debt levels and agreed to leverage their bailout plan 4 to 5 times in order to handle other debt laden states. The S&P 500 (SPX) is fractionally lower for 2011 while the Nasdaq composite and Dow Jones Industrial Average (DJIA) are modestly higher. Stocks confirmed their latest rally attempt on Tuesday (10.18.11) day 12 of their rally attempt when the SPX and NYSE composite scored proper follow-through days (FTD). It is important to note that every major rally in history began with a FTD but not every FTD leads to a new rally. That said, one can err on the bullish side as long as the major averages remain above their 50 DMA lines.
Stocks End October On A Low Note, Bank of Japan Intervenes To Curb Yen
Risk assets fell on Monday after the Bank of Japan intervened in the currency market to curb their red-hot yen ahead of the G-20 meeting later this week. October will go down in history as the best month for the DJIA since 2002 and the best month for the benchmark SPX since 1991! From the 10/4 low-10/31’s close: SPX jumped +16.6%, NDX +15.5%, DJIA +15%, & R2K (RUT) vaulted +23.15%!
At this point, the market is clearly extended to the upside and due for a pullback. They key is to ascertain the health and duration of the pullback to see if it is an orderly (i.e. normal) pullback or something more severe. With this market and the VIX near 30, anything is possible. From our point of view, the bulls remain in control as long as the SPX stays above the middle of its bullish double bottom pattern; 1230.
Market Outlook- Confirmed Rally:
The major U.S. averages are back in a new confirmed rally and broke above the mid-point/resistance of their 6-week bullish double bottom base. The benchmark S&P 500 index scored a proper FTD on Tuesday, October 18, 2011, i.e. Day 12, when it rallied over 2% on heavier volume than the prior session. In addition, it is important to note that the bulls scored a victory since many of the major averages closed above their downward sloping 50 DMA lines for the first time since late July! Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. 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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