26 Nov
Daily Market Commentary

Stocks End Holiday Week Mixed

Friday, November 26, 2010
Stock Market Commentary:

Stocks closed mixed during this shortened holiday week as the euro plunged on fresh debt woes and tech stocks jumped on stronger than expected US economic data. The rally which began on the September 1, 2010 follow-through day ended on Tuesday. November 16, 2010 as stocks and commodities plunged in heavy trade. Wednesday marked day 1 of a new rally attempt, which means that as long as Wednesday’s lows are not breached, the window is now open for a new follow-through day.

Monday & Tuesday’s Action: Geopolitical Woes Send Euro Plunging:

On Monday, stocks and commodities fell as the USD rallied after Ireland’s political environment fell into turmoil. Over the weekend, Ireland’s government said it would accept an emergency aid package from the EU/IMF. However, on Monday, the euro plunged in heavy trade after failing at resistance (formerly support near 138) as fear spread that other EU nations will need to be bailed out. Elections are slated for January and the Green Party said it would pull out of Prime Minister Brian Cowen’s coalition due to the onerous debt woes. The last thing the country needs right now is political instability. It will be very interesting to see how this plays out over the next few months.
On Tuesday, stocks and a handful of commodities fell as the USD rallied after a slew of geopolitical threats sent investors rushing to so called “safe” investments (i.e. USD and Gold). Overnight, North Korea attacked a South Korean island and concern grew that Europe’s debt crisis will spread beyond Greece and Ireland. Elsewhere, several leading banks in China fell on concern that Beijing will raise their reserve requirements again. Before Tuesday’s open, the government said GDP rose at a +2.5% annual rate in the third quarter which topped the initial estimate of +2%. After Tuesday’s open, the National Association of Realtors said existing home sales fell in October which is the latest evidence that the beaten up housing market is still in shambles. At 2pm EST, the Federal Reserve released the minutes of its latest meeting which largely reiterated the recent Fed rhetoric and helped explain QE II.
Wednesday & Friday’s Action: Stocks Drift Lower As Geopolitical Tensions Mount:
Stocks soared on Wednesday as investors digested a slew of economic data and the geopolitical woes eased. This week the euro has been smacked hard as several EU political heavy weights expressed concern regarding the fate of the EU. German Chancellor Angela Merkel said on Tuesday that the Euro was in danger. On Wednesday, Ivan Miklos, Slovakia’s finance minister said the euro zone may break up or function with serious problems due to the ongoing debt woes.
The economic news was mixed but it was encouraging to see stocks rally which bodes well for the latest rally attempt. Before Wednesday’s open, the Labor Department said jobless claims fell which helped allay concerns that the ailing jobs market was not recovering. Elsewhere, durable goods and new home sales both fell short of analyst estimates which bodes poorly for the ailing housing market. US markets were closed on Thursday in observance of the Thanksgiving. Stocks closed early but fell on Friday amid fresh concerns that more EU nations (i.e. Spain & Portugal) will need to be bailed out.

Market Action- 12 Week Rally Ends – Week 2- In A Correction:

It was encouraging to see the bulls show up and defend the Dow Jones Industrial Average’s 50 DMA line. The 12-week rally ended on Tuesday, November 16, 2010 after the major averages plunged in heavy volume back down towards their respective 50 DMA lines. In recent weeks, we have repeatedly written about how the major averages were experiencing wide-and-loose action after a big move and made it very clear that that was not a healthy sign. At this point, we are looking for a new rally to be confirmed with a new follow-through day before taking any new positions. Caution and patience are key at this point. Trade accordingly.

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How we can improve your performance:

  • Achieve better results in the market by working with an objective third party.
  • Provide you with sound buy/sell ideas in real-time.
  • Provide objective feedback on your investment ideas and market outlook.
  • Contribute profitable ideas to your investment committee (if applicable).
  • All investment ideas are fully transparent, unbiased, and based on market action, not opinions.
  • Help create uniformed structure within your organization.

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24 Nov
Daily Market Commentary

Investors Gobble Up Shares Ahead of Thanksgiving

Wednesday, November 24, 2010
Stock Market Commentary:

Stocks and a handful of commodities rallied on Wednesday thanks to a series of stronger than expected economic data coupled with relative calm overseas. The rally which began on the September 1, 2010 follow-through day ended on Tuesday. November 16, 2010 as stocks and commodities plunged in heavy trade. Wednesday marked day 1 of a new rally attempt, which means that as long as Wednesday’s lows are not breached, the earliest a possible FTD could emerge will be Monday, November 22, 2010.

Geopolitical Woes Ease But Euro Is “In Danger”:

News was relatively quiet overseas which set the stage for a strong open in the US. This week the euro has been smacked hard as several EU political heavy weights expressed concern regarding the fate of the EU. German Chancellor Angela Merkel said on Tuesday that the Euro was in danger. On Wednesday, Ivan Miklos, Slovakia’s finance minister said the euro zone may break up or function with serious problems due to the ongoing debt woes.
U.S. Economic News Is Mixed:
The economic news was mixed but it was encouraging to see stocks rally which bodes well for this 6 day rally attempt. Before Wednesday’s open, the Labor Department said jobless claims fell which helped allay concerns that the ailing jobs market was not recovering. Elsewhere, durable goods and new home sales both fell short of analyst estimates which bodes poorly for the ailing housing market.

Market Action- 12 Week Rally Ends – Week 2- In A Correction:

It was encouraging to see the bulls show up and defend the Dow Jones Industrial Average’s 50 DMA line. The 12-week rally ended on Tuesday, November 16, 2010 after the major averages plunged in heavy volume back down towards their respective 50 DMA lines. In recent weeks, we have repeatedly written about how the major averages were experiencing wide-and-loose action after a big move and made it very clear that that was not a healthy sign. At this point, we are looking for a new rally to be confirmed with a new follow-through day before taking any new positions. Caution and patience are key at this point. Trade accordingly.

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Sarhan Wealth Management provides both global macro and equity only consulting services to high net worth and institutional clients around the world. For years, our clientele has participated in the firm’s objective market-based outlook, which has one primary goal: to provide robust trading ideas across all asset classes. Since 2004 we have outperformed the S&P 500 on a regular basis. These results are based solely on our weekly research. All our historical data is available upon request.
How we can improve your performance:

  • Achieve better results in the market by working with an objective third party.
  • Provide you with sound buy/sell ideas in real-time.
  • Provide objective feedback on your investment ideas and market outlook.
  • Contribute profitable ideas to your investment committee (if applicable).
  • All investment ideas are fully transparent, unbiased, and based on market action, not opinions.
  • Help create uniformed structure within your organization.

Contact Us To Learn How We Can Help You!

23 Nov
Daily Market Commentary

Korea, China, & EU Debt Woes Send Dow Below 50 DMA Line

Tuesday, November 23, 2010
Stock Market Commentary:

Stocks and a handful of commodities fell as the USD rallied after a slew of geopolitical threats sent investors rushing to so called “safe” investments (i.e. USD and Gold). The rally which began on the September 1, 2010 follow-through day ended on Tuesday. November 16, 2010 as stocks and commodities plunged in heavy trade. Wednesday marked day 1 of a new rally attempt, which means that as long as Wednesday’s lows are not breached, the earliest a possible FTD could emerge will be Monday, November 22, 2010.

Korea, EU Debt Woes & Chinese Reserve Requirements Hurt Stocks:

Overnight, North Korea attacked a South Korean island and concern grew that Europe’s debt crisis will spread beyond Greece and Ireland. Elsewhere, several leading banks in China fell on concern that Beijing will raise their reserve requirements again. South Korea scrambled fighter jets and returned fire after North Korea sent dozens of shells at Yeonpyeong island. Several world leaders condemend North Korea’s action and said the news was very alarming.
U.S. GDP Tops Estimates & Fed Minutes:
Before Tuesday’s open, the government said GDP rose at a +2.5% annual rate in the third quarter which topped the initial estimate of +2%. After Tuesday’s open, the National Association of Realtors said existing home sales fell in October which is the latest evidence that the beaten up housing market is still in shambles. At 2pm EST, the Federal Reserve released the minutes of its latest meeting which largely reiterated the recent Fed rhetoric and helped explain QE II.

Market Action- 12 Week Rally Ends – Week 2 In A Correction:

It was disconcerting to see the Dow Jones Industrial Average slice below its 50 DMA line for the first time since the FTD. The 12-week rally ended on Tuesday, November 16, 2010 after the major averages plunged in heavy volume back down towards their respective 50 DMA lines. In recent weeks, we have repeatedly written about how the major averages were experiencing wide-and-loose action after a big move and made it very clear that that was not a healthy sign. At this point, we are looking for a new rally to be confirmed with a new follow-through day before taking any new positions. Caution and patience are key at this point. Trade accordingly.

Are You Looking For Someone To Manage Your Money?
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Sarhan Wealth Management provides both global macro and equity only consulting services to high net worth and institutional clients around the world. For years, our clientele has participated in the firm’s objective market-based outlook, which has one primary goal: to provide robust trading ideas across all asset classes. Since 2004 we have outperformed the S&P 500 on a regular basis. These results are based solely on our weekly research. All our historical data is available upon request.
How we can improve your performance:

  • Achieve better results in the market by working with an objective third party.
  • Provide you with sound buy/sell ideas in real-time.
  • Provide objective feedback on your investment ideas and market outlook.
  • Contribute profitable ideas to your investment committee (if applicable).
  • All investment ideas are fully transparent, unbiased, and based on market action, not opinions.
  • Help create uniformed structure within your organization.

Contact Us To Learn How We Can Help You!

22 Nov
Daily Market Commentary

Stocks Mixed As Dollar Rallies

Monday, November 22, 2010
Stock Market Commentary:

Stocks and commodities fell as the USD rallied after Ireland’s political environment fell into turmoil. The rally which began on the September 1, 2010 follow-through day ended on Tuesday. November 16, 2010 as stocks and commodities plunged in heavy trade. Wednesday marked day 1 of a new rally attempt, which means that as long as Wednesday’s lows are not breached, the earliest a possible FTD could emerge will be Monday, November 22, 2010.

EU Debt Contagion Sends Stocks Lower:

Over the weekend, Ireland’s government said it would accept an emergency aid package from the EU/IMF. However, on Monday, the euro plunged in heavy trade after failing at resistance (formerly support near 138) after fear spread that other EU nations will need to be bailed out and Ireland’s credit rating may be downgraded. Moody’s Investors Service said a “ multi-notch” downgrade in Ireland’s Aa2 credit rating was “most likely” because the country’s emergency bailout package would increase (not decrease) its debt burden. Elections are slated for January and the Green Party said it would pull out of Prime Minister Brian Cowen’s coalition due to the onerous debt woes. The last thing the country needs right now is political instability. It will be very interesting to see how this plays out.

Market Action- 12 Week Rally Ends – Week 2 In A Correction:

The 12-week rally ended on Tuesday, November 16, 2010 after the major averages plunged in heavy volume back down towards their respective 50 DMA lines. In recent weeks, we have repeatedly written about how the major averages were experiencing wide-and-loose action after a big move and made it very clear that that was not a healthy sign. At this point, we are looking for a new rally to be confirmed with a new follow-through day before taking any new positions. However, we would be remiss not to note that the major averages deserve the bullish benefit of the doubt as long as they remain above their respective 50 DMA lines.  Caution and patience are key at this point. Trade accordingly.

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Sarhan Wealth Management provides both global macro and equity only consulting services to high net worth and institutional clients around the world. For years, our clientele has participated in the firm’s objective market-based outlook, which has one primary goal: to provide robust trading ideas across all asset classes. Since 2004 we have outperformed the S&P 500 on a regular basis. These results are based solely on our weekly research. All our historical data is available upon request.
How we can improve your performance:

  • Achieve better results in the market by working with an objective third party.
  • Provide you with sound buy/sell ideas in real-time.
  • Provide objective feedback on your investment ideas and market outlook.
  • Contribute profitable ideas to your investment committee (if applicable).
  • All investment ideas are fully transparent, unbiased, and based on market action, not opinions.
  • Help create uniformed structure within your organization.

Contact Us To Learn How We Can Help You!

19 Nov
Daily Market Commentary

Week 2: Stocks & Commodities Fall

Friday, November 19, 2010
Stock Market Commentary:

Stocks and commodities ended in the upper half of their respective ranges for the week after Ireland’s central bank said it will accept an emergency loan from the EU/IMF. The rally which began on the September 1, 2010 follow-through day ended on Tuesday as stocks and commodities plunged in heavy trade. Wednesday marked day 1 of a new rally attempt, which means the earliest a possible FTD could emerge will be Monday, November 22, 2010.

Monday- Wednesday’s Action: Stocks & Commodities Smacked As Dollar Soars:

On Monday, stocks and commodities ended mixed as the USD advanced against the euro. The “big” story that continues to weigh on the market is the ongoing geopolitical woes in Europe. Over the weekend, both the IMF and Irish government said Ireland does not need additional aid to stay solvent. In Italy, four top officials in Italian Prime Minister Silvio Berlusconi’s government, including a Cabinet minister, will resign today in a move designed to trigger early elections and topple oust the current regime. In the U.S., retail sales topped estimates in October, thanks in part to stronger auto sales. The news helped lift stocks and offset concern from a softer than expected mfg report from the NY region.
On Tuesday, stocks and commodities got smacked as the euro plunged to a fresh multi-month low and the USD continued marching higher. Ireland’s government held an emergency meeting to discuss the possibility of a bailout. In other news, Austria said it did not want to contribute to Greece’s bailout because they did not satisfy several conditions of their prior bailout. In the US, the producer price index (PPI) came in less than expected which allayed inflation woes but sparked concerns about deflation.

Consumer Price Index Tame, Housing Starts Fall, EU Debt Woes Ease:

Wednesday was a quiet day as markets simply consolidated Tuesday’s large move. The euro squeezed out a small gain after CPI fell short of analyst estimates and housing starts plunged. The weaker dollar helped the major averages end relatively flat on the day. Overseas, the European Union has agreed in principle to help bailout Ireland. Looking forward, the two important questions are: 1.) how many more countries will need to be bailed out? 2.) How many more countries can the EU afford to bailout?

Thursday & Friday’s Action: Ireland’s Bailed Out & China Raises Reserve Requirement:

On Thursday, Ireland’s central bank said it is prepared to accept emergency aid from the ECB and the IMF which helped the euro surge nearly 2 handles! The weaker dollar helped send a slew of dollar denominated assets higher (mainly stocks and commodities). Elsewhere, the much anticipated GM IPO was a huge success which also helped the market rally. On the economic front, the news was positive: Philly Fed Mfg data surged while jobless claims were slightly higher. The stronger economic data helped stocks rally and bodes well for the global recovery. On Friday, China’s central bank said it was raising the reserve requirement on its banks in an effort to curb inflation and curtail their robust economy. The news put modest pressure on stocks and commodities.

Market Action- 12 Week Rally Ends – In A Correction:

The 12-week rally ended on Tuesday, November 16, 2010 after the major averages plunged in heavy volume back down towards their respective 50 DMA lines. In recent weeks, we have repeatedly written about how the major averages were experiencing wide-and-loose action after a big move and made it very clear that that was not a healthy sign. At this point, we are looking for a new rally to be confirmed with a new follow-through day before taking any new positions. However, we would be remiss not to note that the major averages deserve the bullish benefit of the doubt as long as they remain above their respective 50 DMA lines.  Caution and patience are key at this point. Trade accordingly.

Are You Looking For Someone To Manage Your Money?
Our Private Wealth Management Services Can Help You!

Sarhan Wealth Management provides both global macro and equity only consulting services to high net worth and institutional clients around the world. For years, our clientele has participated in the firm’s objective market-based outlook, which has one primary goal: to provide robust trading ideas across all asset classes. Since 2004 we have outperformed the S&P 500 on a regular basis. These results are based solely on our weekly research. All our historical data is available upon request.

How we can improve your performance:

  • Achieve better results in the market by working with an objective third party.
  • Provide you with sound buy/sell ideas in real-time.
  • Provide objective feedback on your investment ideas and market outlook.
  • Contribute profitable ideas to your investment committee (if applicable).
  • All investment ideas are fully transparent, unbiased, and based on market action, not opinions.
  • Help create uniformed structure within your organization.

Contact Us To Learn How We Can Help You!

18 Nov
Daily Market Commentary

Stocks & Commodities Rally As Dollar Falls

Thursday, November 18, 2010
Stock Market Commentary:

Stocks and commodities rallied as the dollar fell after Ireland’s central bank said it will accept an emergency loan from the ECB/IMF. The rally which began on the September 1, 2010 follow-through day ended on Tuesday as stocks and commodities plunged in heavy trade. Wednesday marked day 1 of a new rally attempt, which means the earliest a possible FTD could emerge will be Monday, November 22, 2010.

Euro Debt Woes Ease; GM Rallies, & US Economic Data Tops Estimates:

Overnight, Ireland’s central bank said it is prepared to accept emergency aid from the ECB and the IMF which helped the euro surge nearly 2 handles! The weaker dollar helped send a slew of dollar denominated assets higher (mainly stocks and commodities). Elsewhere, the much anticipated GM IPO was a huge success which also helped the market rally. On the economic front, the news was positive: Philly Fed Mfg data surged while jobless claims were slightly higher. The stronger economic data helped stocks rally and bodes well for the global recovery.

Market Action- 12 Week Rally Ends – In A Correction:

The 12-week rally ended on Tuesday, November 16, 2010 after the major averages plunged in heavy volume back down towards their respective 50 DMA lines. In recent weeks, we have repeatedly written about how the major averages were experiencing wide-and-loose action after a big move and made it very clear that that was not a healthy sign. At this point, we are looking for a new rally to be confirmed with a new follow-through day before taking any new positions. Caution and patience are key at this point. Trade accordingly.

Are You Looking For Someone To Manage Your Money?
Our Private Wealth Management Services Can Help You!

Sarhan Wealth Management provides both global macro and equity only consulting services to high net worth and institutional clients around the world. For years, our clientele has participated in the firm’s objective market-based outlook, which has one primary goal: to provide robust trading ideas across all asset classes. Since 2004 we have outperformed the S&P 500 on a regular basis. These results are based solely on our weekly research. All our historical data is available upon request.
How we can improve your performance:

  • Achieve better results in the market by working with an objective third party.
  • Provide you with sound buy/sell ideas in real-time.
  • Provide objective feedback on your investment ideas and market outlook.
  • Contribute profitable ideas to your investment committee (if applicable).
  • All investment ideas are fully transparent, unbiased, and based on market action, not opinions.
  • Help create uniformed structure within your organization.

Contact Us To Learn How We Can Help You!

17 Nov
Daily Market Commentary

Stocks Consolidate Recent Decline

Wednesday, November 17, 2010
Stock Market Commentary:

Stocks and commodities ended mixed one day after the 12-week rally came to an end. The rally which began on the September 1, 2010 follow-through day ended on Tuesday as stocks and commodities plunged in heavy trade. The major averages have suffered an ominous series of distribution days in a short period of time which suggests sellers are gaining traction.

Consumer Price Index Tame, Housing Starts Fall, EU Debt Woes Ease:

The euro squeezed out a small gain after CPI fell short of analyst estimates and housing starts plunged. The weaker dollar helped the major averages end relatively flat on the day. Overseas, the European Union has agreed in principle to help bailout Ireland. Looking forward, the two important questions are: 1.) how many more countries will need to be bailed out? 2.) How many more countries can the EU afford to bailout? Thursday will be an interesting day as GM will begin trading (it is expected to be the largest IPO in US history) and a slew of economic data is slated to be released.

Market Action- 12 Week Rally Ends – In A Correction:

The 12-week rally ended on Tuesday, November 16, 2010 after the major averages plunged in heavy volume back down towards their respective 50 DMA lines. In recent weeks, we have repeatedly written about how the major averages were experiencing wide-and-loose action after a big move and made it very clear that that was not a healthy sign. At this point, we are looking for a new rally to be confirmed with a new follow-through day before taking any new positions. Caution and patience are key at this point. Trade accordingly.

Are You Looking For Someone To Manage Your Money?
Our Private Wealth Management Services Can Help You!

Sarhan Wealth Management provides both global macro and equity only consulting services to high net worth and institutional clients around the world. For years, our clientele has participated in the firm’s objective market-based outlook, which has one primary goal: to provide robust trading ideas across all asset classes. Since 2004 we have outperformed the S&P 500 on a regular basis. These results are based solely on our weekly research. All our historical data is available upon request.
How we can improve your performance:

  • Achieve better results in the market by working with an objective third party.
  • Provide you with sound buy/sell ideas in real-time.
  • Provide objective feedback on your investment ideas and market outlook.
  • Contribute profitable ideas to your investment committee (if applicable).
  • All investment ideas are fully transparent, unbiased, and based on market action, not opinions.
  • Help create uniformed structure within your organization.

Contact Us To Learn How We Can Help You!

16 Nov
Daily Market Commentary

Stocks & Commodities Smacked As EU Debt Woes Continue

Tuesday, November 16, 2010
Stock Market Commentary:

Stocks and commodities got smacked as the euro plunged to a fresh multi-month low and the USD continued marching higher. The 12-week rally is currently under pressure evidenced by the ominous number of distribution days that have emerged in recent weeks coupled with the sloppy action we have outlined several times in this column.

EU Debt Woes Continue To Weigh On Markets:

The “big” story that continues to weigh on the market is the ongoing geopolitical woes in Europe. On Tuesday, Ireland’s government held an emergency meeting to discuss the possibility of a bailout. In other news, Austria said it did not want to contribute to Greece’s bailout because they did not satisfy several conditions of their prior bailout. In the US, the producer price index (PPI) came in less than expected which allayed inflation woes but sparked concerns about deflation. The consumer price index (CPI) is slated to be released before Wednesday’s open.

Market Action- Confirmed Rally, Week 12:

Heretofore, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been strong but the market action has been wide-and-loose which is not a healthy sign and has caused the major averages to all pullback to their respective 50 DMA lines. This is the next important level of support for the major averages and several leading stocks. It is of the utmost importance for the bulls to show up and defend the 50 DMA line in order for this rally to remain intact. Caution and patience is key at this point. Trade accordingly.

Are You Looking For Someone To Manage Your Money?
Our Private Wealth Management Services Can Help You!

Sarhan Wealth Management provides both global macro and equity only consulting services to high net worth and institutional clients around the world. For years, our clientele has participated in the firm’s objective market-based outlook, which has one primary goal: to provide robust trading ideas across all asset classes. Since 2004 we have outperformed the S&P 500 on a regular basis. These results are based solely on our weekly research. All our historical data is available upon request.
How we can improve your performance:

  • Achieve better results in the market by working with an objective third party.
  • Provide you with sound buy/sell ideas in real-time.
  • Provide objective feedback on your investment ideas and market outlook.
  • Contribute profitable ideas to your investment committee (if applicable).
  • All investment ideas are fully transparent, unbiased, and based on market action, not opinions.
  • Help create uniformed structure within your organization.

Contact Us To Learn How We Can Help You!

15 Nov
Daily Market Commentary

Stocks End Mixed As US Dollar Rallies

Monday, November 15, 2010
Stock Market Commentary:

Stocks and commodities ended mixed as the USD advanced against the euro. Volume patterns remain relatively healthy as the major averages have now entered their 12th week of their ongoing rally. On average, market internals remain healthy evidenced by an upward sloping Advance/Decline line and the fact that new 52-week highs continue to easily outnumber new 52-week lows on both exchanges.

EU Debt Woes Continue To Weigh On Markets:

The “big” story that continues to weigh on the market is the ongoing geopolitical woes in Europe. Over the weekend, both the IMF and Irish government said Ireland does not need additional aid to stay solvent. In Italy, four top officials in Italian Prime Minister Silvio Berlusconi’s government, including a Cabinet minister, will resign today in a move designed to trigger early elections and topple oust the current regime. In the U.S., retail sales topped estimates in October, thanks in part to stronger auto sales. The news helped lift stocks and offset concern from a softer than expected mfg report from the NY region.

Market Action- Confirmed Rally, Week 12:

Heretofore, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been strong but the market action has been wide-and-loose which is not a healthy sign. The next level of support for the major averages is their October highs (SPX 1185-1190), then their respective 50-day moving average (DMA) lines. Trade accordingly.

12 Nov
Daily Market Commentary

Stocks Snap a 5-Week Winning Streak

Friday, November 12, 2010
Stock Market Commentary:

Stocks and commodities snapped a 5-week winning streak as the US dollar rallied one week after the Fed’s historic QE II announcement. Volume patterns remain healthy as the major averages have now completed the 11th week of their ongoing rally. On average, market internals remain healthy evidenced by an upward sloping Advance/Decline line and the fact that new 52-week highs continue to easily outnumber new 52-week lows on both exchanges.

Monday-Wednesday’s Action:

The “big” story this week was a falling euro. The euro fell to a six week low versus the US dollar as concern spread that some European governments will struggle to repay their debt. This sent a slew of dollar denominated assets lower (mainly stocks and commodities). We would be remiss not to note that these markets are currently very extended and a pullback of some sort will do wonders to restore the health of this ongoing 11-week bull run. On Tuesday, gold and silver marked their highs for the week when they negatively reversed from new high ground. On Wednesday, the Labor Department said weekly jobless claims fell which suggested that the jobs market is improving. Elsewhere, the trade balance topped estimates which was a welcomed sign for both the market and the economy. Equally important, leading stocks remain healthy which is a very strong sign.

Thursday & Friday- Cisco Gaps Down and Inflation Picks Up In China:

After Wednesday’s close, shares of Cisco Systems (CSCO) gapped down over -10% after reporting their latest quarterly result. This put downward pressure on futures and led to a soft open on Thursday. Overnight, China said its consumer price index, a popular gauge of inflation, rose +4.4% in October. The prospect of higher inflation coupled with robust economic growth in China will likely lead the Chinese central bank to raise rates to curb inflation and curtail their robust growth. This sent the US dollar higher which in turn added more downward pressure on equity futures. However, it is encouraging to see the action in leading stocks remain robust as the market stubbornly holds on to its recent gains.

Market Action- Confirmed Rally, Week 11:

Heretofore, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been strong but the market action has been wide-and-loose which is not a healthy sign. The next level of support for the major averages is their October highs (SPX 1190-1195), then their respective 50-day moving average (DMA) lines. Trade accordingly.

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ACT NOW!

Sarhan Wealth Management provides both global macro and equity only consulting services to high net worth and institutional clients around the world. For years, our clientele has participated in the firm’s objective market-based outlook, which has one primary goal: to provide robust trading ideas across all asset classes. Since 2004 we have outperformed the S&P 500 on a regular basis. These results are based solely on our weekly research. All our historical data is available upon request.
How we can improve your performance:

  • Achieve better results in the market by working with an objective third party.
  • Provide you with sound buy/sell ideas in real-time.
  • Provide objective feedback on your investment ideas and market outlook.
  • Contribute profitable ideas to your investment committee (if applicable).
  • All investment ideas are fully transparent, unbiased, and based on market action, not opinions.
  • Help create uniformed structure within your organization.

Contact Us To Learn How We Can Help You!

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