Tuesday, January 18, 2011
Stock Market Commentary:
The major averages opened lower but closed near its highs as traders returned from a long weekend. Heretofore, market internals remain healthy evidenced by broad leadership, favorable volume patterns, a rising advance/decline line, and a healthy number of new highs on both major exchanges.
China & Latest Economic News:
US markets were closed on Monday in observance of the MLK holiday. Overseas stocks ended mixed as the USD rallied. Over the weekend, China tightened its reserve requirements (again) in its latest attempt to curb its red-hot economy and curtail inflation. The latest round of earnings were mixed to slightly higher which bodes well for this 21 week rally. We are now in the heart of earnings season with many large companies slated to release earnings in the next few days/weeks (C, AAPL, GOOG, IBM, DAL, etc.). Elsewhere, US economic news was mixed; mfg in the NY area rose while home builders confidence fell (due to tough access to credit).
Market Winning Streak: Continues
According to data compiled by Bespoke Investment Group, “The Nasdaq-100 climbed to the highest level since February 2001 on Jan. 14 and the S&P 500 closed at the highest since August 2008. The S&P 500 has advanced for seven straight weeks, the longest rally since May 2007. Since 1928, gains of that length for the S&P 500 were followed by an average rally of 0.8 percent in the eighth week and 1.3 percent over a month.”
Market Action- Market In Confirmed Rally; Week 21
It was encouraging to see the bulls show up in November and defend the major averages’ respective 50 DMA lines. The market remains in a confirmed rally until those levels are breached. The tech-heavy Nasdaq composite and small-cap Russell 2000 indexes continue to lead evidenced by their shallow correction and strong recovery. However, it is important to note that stocks are a bit extended here and a pullback of some sort (back to the 50 DMA lines) would do wonders to restore the health of this bull market. Put simply, stocks are strong. Trade accordingly. If you are looking for specific high ranked ideas, 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.
Strong Start to Shortened Holiday Week
Tuesday, January 18, 2011
Stock Market Commentary:
The major averages opened lower but closed near its highs as traders returned from a long weekend. Heretofore, market internals remain healthy evidenced by broad leadership, favorable volume patterns, a rising advance/decline line, and a healthy number of new highs on both major exchanges.
China & Latest Economic News:
US markets were closed on Monday in observance of the MLK holiday. Overseas stocks ended mixed as the USD rallied. Over the weekend, China tightened its reserve requirements (again) in its latest attempt to curb its red-hot economy and curtail inflation. The latest round of earnings were mixed to slightly higher which bodes well for this 21 week rally. We are now in the heart of earnings season with many large companies slated to release earnings in the next few days/weeks (C, AAPL, GOOG, IBM, DAL, etc.). Elsewhere, US economic news was mixed; mfg in the NY area rose while home builders confidence fell (due to tough access to credit).
Market Winning Streak: Continues
According to data compiled by Bespoke Investment Group, “The Nasdaq-100 climbed to the highest level since February 2001 on Jan. 14 and the S&P 500 closed at the highest since August 2008. The S&P 500 has advanced for seven straight weeks, the longest rally since May 2007. Since 1928, gains of that length for the S&P 500 were followed by an average rally of 0.8 percent in the eighth week and 1.3 percent over a month.”
Market Action- Market In Confirmed Rally; Week 21
It was encouraging to see the bulls show up in November and defend the major averages’ respective 50 DMA lines. The market remains in a confirmed rally until those levels are breached. The tech-heavy Nasdaq composite and small-cap Russell 2000 indexes continue to lead evidenced by their shallow correction and strong recovery. However, it is important to note that stocks are a bit extended here and a pullback of some sort (back to the 50 DMA lines) would do wonders to restore the health of this bull market. Put simply, stocks are strong. Trade accordingly. If you are looking for specific high ranked ideas, 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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