Stock Market Commentary

  • Dow & S&P 500 Enjoy Best Close of 2009!

    ByAdam Sarhan

    Looking at the recent action in the market, the Dow Jones Industrial Average and benchmark S&P 500 index enjoyed their best close of the year as they continue flirting with important resistance levels (10,500 and 1,115 respectively.). The major averages continue acting well as they remain perched just below resistance (their respective 2009 highs) and above their respective 50-day moving average lines. Both these factors are considered healthy and bodes well for this 8-month (41-week) rally. It was also encouraging to see the Nasdaq close above 2,200 which has served as formidable resistance over the past few months. A slew of economic data is slated to be released this week and, as always, it will be very important to see how the market reacts to that news.

  • Late Dollar Decline Lifts Stocks

    ByAdam Sarhan

    Around 2pm EST the greenback started to fall and U.S. stocks started to rally. Apple Inc. (AAPL) vaulted +$7.66, or +4.18%, and closed above its 50 DMA line on above average volume. Apple has been a strong leader since the March lows and the fact that it quickly repaired the damage is a bullish sign for this rally. A new crop of high ranked stocks are currently working on new bases (Read:10 Stocks on My Watchlist 12.09.09) as the major averages continue consolidating their recent gains above their respective 50 DMA lines. It was encouraging to see the benchmark S&P 500 bounce off support (shown above) for the fourth time in the past few weeks. To be clear, the bulls deserve the bullish benefit of the doubt until the major averages close below their respective 50 DMA lines. At this point, they are acting well and appear to want to move higher.

  • Stocks Fall On Negative Economic Data

    ByAdam Sarhan

    The market remains resilient as it simply refuses to go down. Longstanding readers of this column know that we prefer to focus more on how the market reacts to the news than the news itself. That said, the bears had all the possible ammunition to send stocks plunging on Tuesday and the fact that they did not (or could not), speaks volumes. In addition, the market remains strong since it has barely “corrected” and continues consolidating its recent move just below resistance. The bulls deserve the bullish benefit of the doubt until one of the major averages trades, and closes, below its respective 50 day moving average line.

  • Stocks End Mixed As Volume Recedes

    ByAdam Sarhan

    The stock market ended mixed on Monday after trading in a very tight range for most of the session. Volume, an important indicator of institutional sponsorship, was lower than Friday’s levels on both major exchanges which suggested large institutions were not aggressively selling stocks. Advancers led decliners by about a 10-to-9 ratio on the NYSE and were roughly even on the Nasdaq exchange. There were 29 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, less than the total of 45 issues that appeared on the prior session. Leadership among high-ranked growth stocks had dried up in recent weeks, so the expansion in new highs this week has been a welcome improvement. New 52-week highs solidly outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange.