Slower Economic Growth Ahead?

ByAdam Sarhan

Thursday, May 19, 2011
Stock Market Commentary:

Stocks and a host of commodities ended mixed after the latest economic data missed estimates. So far, the old adage, “Sell in May and Go Away,” appears to be working brilliantly. From our vantage point, the market rally remains under pressure due to the lackluster action in the major averages and several leading stocks.

Lousy Economic Data Weighs On Stocks:

Investors digested a slew of economic data on Thursday. On the plus side, the Labor Department said weekly jobless claims fell by -29,000 to 409,000 last week but the four-week average is still above 400,000. On the downside, existing homes sales missed estimates at a 5.05 million annual unit rate, down -0.8% in April and tanked -12.9% vs. the same period in 2010. Leading economic indicators fell -0.3% in April following a 0.7% jump in March. The report also missed the Street’s estimates. In other news, the Philly Fed Survey also missed estimates which suggests sluggish economic growth may be on the horizon.

Market Outlook- Rally Under Pressure

From our point of view, the market rally is under serious pressure which suggests caution is paramount at this juncture. Looking forward, the next level of support for the major averages are their respective 50 DMA lines and resistance is their 2011 highs. The rally remains in tact as long as support holds on a closing basis. If you are looking for specific help navigating this market, please contact us for more information.

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Stocks Continue To Slide

ByAdam Sarhan

Market Action- Rally Under Pressure; Week 26

It was encouraging to see the bulls show up and defend the major averages’ respective 50 DMA lines in November as this market proves resilient and simply refuses to go down. From our point of view, the market remains in rally-mode 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. If you are looking for specific high ranked ideas, please contact us for more information.

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