13 Oct
Daily Market Commentary

Stocks Rally On Solid Earnings & Economic Data

Wednesday, October 13, 2010
Stock Market Commentary:

Stocks rallied after the latest round of stronger than expected earnings and economic data hit the wires. Volume patterns remain healthy as the major averages continue marching higher. Healthy volume patterns are important because they suggest large institutional investors are aggressively buying, not selling, stocks.   It is also encouraging to see, 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.
The rally began overnight when Japan reported machinery orders surged +10.1% compared to a -4.5% decline forecast. More stronger than expected economic data was released in the US when import prices fell in September, reflecting a drop in energy prices. The -0.3% decline in the import-price index topped the median forecast and followed a +0.6% gain in August. Earnings news also topped estimates with companies such as CSX Corp (CSX), Intel Inc. (INTL), and JPMorgan Chase (JPM) releasing their Q3 results. The fact that the market rallied on the news bodes well for this 7-week rally.

Market Action- Confirmed Rally:

So far, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been very strong and stocks are simply pausing to consolidate their recent gains. It was encouraging to see the bulls show up and defend support (formerly resistance) in recent weeks. The next level of support for the major averages is their September highs, then their respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly.

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12 Oct
Daily Market Commentary

Tight Trading Range Continues

Tuesday, October 12, 2010
Stock Market Commentary:

Stocks opened lower as the US dollar rallied and concern spread that China’s economic growth may begin to slow but the bulls showed up in the afternoon on renewed prospects of QE 2.  Volume was heavier than the prior session which signals that large institutions are not aggressively buying or selling stocks.  On average, market internals remain healthy evidenced by an upward sloping Advance/Decline line and the fact that new 52-week highs easily outnumber new 52-week lows on both exchanges.

Fed Minutes- QE 2 On The Horizon:

At 2pm EST, the Federal Reserve released the minutes of their September 21 meeting. As expected, the minutes echoed the Fed’s rhetoric and showed that policy makers are willing to step up and defend the US economy from entering a double dip recession, if needed. The USD fell and the major averages rallied after the minutes were released. The minutes also showed that policy makers are prepared to ease monetary policy “before long” and focused on purchases of Treasuries and boosting inflation expectations as ways to add stimulus.
Wall Street, dubbed this phenomenon QE 2 which stands for quantitative easing two. It is important to note that much of the 2009 rally was directly due to QE 1, so do not underestimate the gravity of QE 2. More recently, stocks rallied last week even after a dismal jobs report largely due to anticipation of QE 2.

Market Action- Confirmed Rally:

So far, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been very strong and stocks are simply pausing to consolidate their recent gains. It was encouraging to see the bulls show up and defend support (formerly resistance) in recent weeks. The next level of support for the major averages is their September highs, then their respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly.

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11 Oct
Daily Market Commentary

Dollar Up; Stocks End Flat

Monday, October 11, 2010
Stock Market Commentary:

Stocks ended flat as the US dollar rallied and a slew of stocks ended near their session lows. Volume totals were reported lighter on the NYSE and on the Nasdaq exchange compared to Friday’s session, which signaled that large institutions were not aggressively buying or selling stocks. Advancers led decliners by a small margin on the NYSE but trailed by a small margin on the Nasdaq exchange. New 52-week highs easily outnumbered new 52-week lows on both exchanges.

Slower Economic Growth Forecasts Curb Gains:

Overnight, stocks in Europe and Asia rallied after the IMF and global leaders met in Washington D.C to discuss the global economy. Global leaders reaffirmed their support for continued global economic growth coupled with low debt. Elsewhere, the National Association for Business Economics (NABE) said its 46-member forecasting panel cut US economic growth projections for both 2010 and 2011 to just +2.6%. In May, the last time they were surveyed, their outlook was +3.2%. Stocks gave back earlier gains after the US dollar rallied. Remember that earnings season has begun and it is very important to protect your capital in the event of an adverse reaction to earnings.

Market Action- Confirmed Rally:

So far, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been very strong and stocks are simply pausing to consolidate their recent gains. It was encouraging to see the bulls show up and defend support (formerly resistance) in recent weeks. The next level of support for the major averages is their respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly.

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08 Oct
Daily Market Commentary

Stocks & Commodities Rally; US Dollar Plunges

Friday, October 8, 2010
Stock Market Commentary:

The major averages ended higher this week as the dollar fell and gold surged to another fresh record high. Volume patterns and market internals remain healthy as the major averages continue moving higher. The story this week continued to be the falling dollar. Gold surged to a new record high of 1366, the Dow Jones Industrial Average topped the psychologically important 11,000 level while oil jumped to a new multi-month high.

Monday & Tuesday’s Action: S&P 500 Breaks out Above 1150!

Stocks closed lower on Monday as the US dollar rallied and US capital goods orders and pending home sales were released. Both reports edged higher but earnings forecasts were lowered on many large cap companies. Pending home sales rose for a second straight month which suggests the housing market may be stabilizing after a lousy second quarter.
Stocks soared on Tuesday, helping the benchmark S&P 500 index jump above its recent near term resistance level of 1150 as the dollar plunged. The catalysts for the large move occurred after the Bank of Japan cut rates to zero, announced another round of asset purchases, and Australia’s central bank held rates steady. Stocks extended their rally after the ISM’s service index rebounded and topped estimates. The faster-than-expected report bodes well for the global recovery.

Wednesday- Friday’s Action: Stocks Consolidate Tuesday Large Rally

On Wednesday, stocks ended mixed after ADP, the country’s largest private payrolls company, said employers cut jobs in September for the first time since the January. The report showed that employers slashed -39,000 jobs, after a revised +10,000 increase in August. The report fell short of the Street’s estimate for a gain of 20,000.
Stocks ended mixed to slightly lower on Thursday after the European Central Bank and the Bank of England kept interest rates steady, near record lows for the 17th consecutive month which matched expectations. In the US, the Labor Department said weekly jobless claims slid by -11,000 to 445,000. Elsewhere, same store chain sales rose which helped allay slowing economic woes. On Friday, the Labor Department said US employers fired -95,000 employees in September while the overall unemployment rate held steady at 9.6%.

Market Action- Confirmed Rally:

So far, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been very strong and stocks are simply pausing to consolidate their recent gains. It was encouraging to see the bulls show up and defend support (formerly resistance) in recent weeks. The next level of support for the major averages is their respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly.

07 Oct
Daily Market Commentary

Stocks End Mixed Ahead Of Jobs Report

Thursday, October 7, 2010
Stock Market Commentary:

Stocks spent most of the session in the red after the latest read on the jobs market fell short of estimates and the US dollar edged higher. Volume totals were reported lighter on the NYSE and on the Nasdaq exchange compared to Wednesday’s session which signaled that large institutions were not aggressively buying or selling stocks. Decliners led advancers by a modest ratio on the NYSE and on the Nasdaq exchange, while new 52-week highs easily outnumbered new 52-week lows on both exchanges. There were 47 high-ranked companies from the CANSLIM.net Leaders List made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, lower from the 58 issues that appeared on the prior session.

Central Bank Action & Latest Economic Data:

Overnight, the European Central Bank and the Bank of England kept interest rates steady, near record lows for the 17th consecutive month which matched expectations. Before Thursday’s opening bell, the Labor Department said weekly jobless claims slid by -11,000 to 445,000. Elsewhere, same store chain sales rose which helped allay slowing economic woes. Investors are now waiting for Friday’s non farm payrolls report for a better read on the fragile jobs market.

Market Action: Confirmed Rally

So far, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been very strong and stocks are simply pausing to consolidate their recent gains. It was encouraging to see the bulls show up and defend support (formerly resistance) in recent weeks. The next level of support for the major averages is their respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly.

06 Oct
Daily Market Commentary

Stocks Slide on Weak Jobs Data

Wednesday, October 6, 2010
Stock Market Commentary:

Stocks spent most of the session in the red after the latest read on the jobs market fell short of estimates. Volume totals were reported lighter on the NYSE and on the Nasdaq exchange compared to Tuesday’s session which signaled that large institutions were not aggressively buying or selling stocks. Decliners led advancers by a modest ratio on the NYSE and on the Nasdaq exchange, while new 52-week highs easily outnumbered new 52-week lows on both exchanges. There were 58 high-ranked companies from the CANSLIM.net Leaders List made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, lower from the 86 issues that appeared on the prior session.

Where Are The Jobs?

Stocks fell on Wednesday after ADP, the country’s largest private payrolls company, said employers cut jobs in September for the first time since the January. The report showed that employers slashed -39,000 jobs, after a revised +10,000 increase in August. The report fell short of the Street’s estimate for a gain of 20,000. This was the first in a series of important reports on the fragile jobs market scheduled to be released later this week. Weekly jobless claims are slated to be released before Thursday’s opening bell and the mother of all economic reports, the monthly nonfarm payrolls report, is set to be released before Friday’s open.

Market Action- Confirmed Rally:

So far, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been very strong and stocks are simply pausing to consolidate their recent gains. It was encouraging to see the bulls show up and defend support (formerly resistance) in recent weeks. The next level of support for the major averages is their respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly.

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Sarhan Capital’s consulting arm allows clients to participate in the idea generation process and be privy to many of Sarhan’s best ideas long before they are highlighted in other publications. In addition, clients receive objective feedback on their own ideas and are alerted each time Sarhan Capital traders buy and sell. Many institutional clients including hedge funds, private family offices, brokerages, registered investment advisers, and corporations, have turned to Sarhan Capital for personalized advisory/consulting services in recent years.

How We Can Help You:

  1. We employ a discretionary long/short global macro strategy that is profitable in both bull and bear markets.
  2. Achieve better results in the market by working with an objective third party who is not an internal “yes” man.
  3. Provide you with sound buy/sell ideas in real-time
  4. Provide objective feedback on your investment ideas and market outlook
  5. Contribute profitable ideas to your investment committee
  6. All investment ideas are fully transparent, unbiased, and based on market action, not someone’s opinion.
  7. Help create uniformed structure within your organization!

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05 Oct
Daily Market Commentary

Stocks Soar As Dollar Plunges

Tuesday, October 5, 2010
Stock Market Commentary:

Stocks soared on Tuesday as the US dollar plunged and central banks in Japan and Australia surprised the Street with their decisions on interest rates. Volume totals were reported higher on the NYSE and on the Nasdaq exchange compared to Monday’s session which signaled that large institutions were aggressively accumulating stocks. Advancers trumped decliners by over a 4-to-1 ratio on the NYSE and on the Nasdaq exchange, while new 52-week highs easily outnumbered new 52-week lows on both exchanges. There were 86 high-ranked companies from the CANSLIM.net Leaders List made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, up nicely from the 19 issues that appeared on the prior session.

Japan & Australia’s Central Banks Surprise Wall Street:

Overnight, the US dollar plunged after the Bank of Japan cut rates to zero, announced another round of asset purchases, and Australia’s central bank held rates steady. Both banks caught analysts off guard which sent stocks and a slew of commodities soaring in overnight trade. Stocks extended their rally after the ISM’s service index rebounded and topped estimates. The faster-than-expected report bodes well for the global recovery.

Market Action: Confirmed Rally:

The action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been very strong and stocks are simply pausing to consolidate their recent gains. It was encouraging to see the bulls show up and defend support (formerly resistance) in recent weeks. The next level of support for the major averages is their respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly.

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04 Oct
Daily Market Commentary

Stocks Fall On Weak Earnings Outlook

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Monday, October 4, 2010
Stock Market Commentary:

Stocks ended lower on Monday as the US dollar rallied and the latest round of economic data was released. Volume totals were reported lower on the NYSE and on the Nasdaq exchange compared to Friday’s session which signaled that large institutions were not aggressively selling stocks. Decliners trumped advancers by nearly a 3-to-1 ratio on the NYSE and on the Nasdaq exchange, while new 52-week highs easily outnumbered new 52-week lows on both exchanges. There were 19 high-ranked companies from the CANSLIM.net Leaders List made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, down from the 84 issues that appeared on the prior session.

Stocks Fall On Weak Earnings Outlook:

US capital goods orders and pending home sales rose in August while earnings forecasts were lowered on many large cap companies. Pending home sales rose for a second straight month which suggests the housing market may be stabilizing after a lousy second quarter. Many leading stocks got smacked on Monday as they pulled back towards important areas of support. The benchmark S&P 500 continued trading between its recent trading range of 1130-1150. One should expect this sideways action to continue until either of these important levels are breached on a closing basis.

Market Action- Confirmed Rally:

The action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been very strong and stocks are simply pausing to consolidate their recent gains. It was encouraging to see the bulls show up and defend support (formerly resistance) in recent weeks. The next level of support for the major averages is their respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly.

Want Better Results?
Our Private Advisory Services Can Help You!

Sarhan Consulting provides both global macro and equity only consulting services to institutional clients around the world. For years, its clientele has participated in the firm’s objective market-based outlook, which has one primary goal: to provide stable trading ideas across all asset classes. 
Sarhan Capital’s consulting arm allows clients to participate in the idea generation process and be privy to many of Sarhan’s best ideas long before they are highlighted in other publications. In addition, clients receive objective feedback on their own ideas and are alerted each time Sarhan Capital traders buy and sell. Many institutional clients including hedge funds, private family offices, brokerages, registered investment advisers, and corporations, have turned to Sarhan Capital for personalized advisory/consulting services in recent years.

How We Can Help You:

  1. We employ a discretionary long/short global macro strategy that is profitable in both bull and bear markets.
  2. Achieve better results in the market by working with an objective third party who is not an internal “yes” man.
  3. Provide you with sound buy/sell ideas in real-time
  4. Provide objective feedback on your investment ideas and market outlook
  5. Contribute profitable ideas to your investment committee 
  6. All investment ideas are fully transparent, unbiased, and based on market action, not someone’s opinion.
  7. Help create uniformed structure within your organization!

 Contact Us Today To See How We Can Help You!

01 Oct
Daily Market Commentary

Relatively Flat Week on Wall Street

Friday, October 1, 2010
Stock Market Commentary:

Stocks ended relatively flat this week as a very powerful September and a strong third quarter came to an end on Thursday. Volume patterns and the market’s internals remain healthy as advancers continue to outnumber decliners and new highs steadily trump new lows on the NYSE and on the Nasdaq exchange.

Monday-Wednesday’s Action: Stocks Pause To Consolidate 4-week Rally:

On Monday, stocks edged lower as investors digested the prior week’s large move. Before Monday’s open, several multi-billion dollar deals were announced: Southwest Airlines (LUV) announced plans to purchase AirTran Holdings Inc. (AAI) for about $1.4 billion, Wal-Mart Stores Inc.(WMT) proposed to buy South African consumer goods distributor Massmart Holdings Ltd. for about $4.25 billion, and Unilever NV announced plans to acquire beauty products manufacturer Alberto Culver Co. (ACV) for $3.7 billion.
On Tuesday, stocks recovered most of Monday’s decline as investors looked past the latest round of lackluster economic data. The S&P Case-Shiller housing price index (HPI) was released which showed a modest uptick in home prices around the country. The news was good, not great. Then the Conference Board’s consumer confidence index slid to 48.5, which was down from August’s reading of 53.2. Despite the negative data, it was encouraging that the bulls showed up and defended support after the benchmark S&P 500 index fell to a 1,132 low. Regular readers of this column know that 1,131 was resistance for most of the summer and has now become near term support.
Stocks fell on Wednesday as protests erupted throughout Europe over the newly announced austerity measures aimed at curbing the region’s onerous debt levels. Protests erupted throughout Europe which brought new worries about the health of the region’s financial system. It was interesting to see the Euro rally, which suggests that investors believe, in the long run, the new austerity measures are a net positive for the region.

Thursday & Friday’s Action- Tight Trading Range Continues (1130-1150):

Before Thursday’s opening bell, the government released two stronger than expected economic reports which helped lift futures. The Commerce Department said the final read on Q2 GDP was +1.7%, higher than the prior estimate of 1.6%. Elsewhere, the Labor Department said initial jobless claims fell -16,000 to 453,000 last week. At 10:00AM EST, the Chicago PMI topped estimates which helped send stocks higher. In Europe, Spain’s credit rating was cut one level from AAA to Aa1. Had this event occurred three months ago, the euro and major equity markets around the world would have been fallen sharply. The somewhat muted decline suggests a currently strong market environment.
Stocks rose on Friday after the latest round of economic data was released. US consumer spending, personal income edged higher which helped offset a lower than expected reading from the ISM manufacturing index. The US dollar fell to a six month low which has helped stocks rally in recent weeks and gold to hit a new record high. 

Market Action- Week 5 Confirmed Rally:

The action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been very strong. Looking forward, the window is open for disciplined investors to carefully buy high-ranked stocks, while many pundits are expecting that markets may consolidate following recent gains. It was encouraging to see the bulls show up and defend support (formerly resistance) in recent weeks. The next level of support for the major averages is their respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly.
________________________________________________________________________

Want Better Results?
Our Private Advisory Services Can Help You!

Sarhan Consulting provides both global macro and equity only consulting services to institutional clients around the world. For years, its clientele has participated in the firm’s objective market-based outlook, which has one primary goal: to provide stable trading ideas across all asset classes. 
Sarhan Capital’s consulting arm allows clients to participate in the idea generation process and be privy to many of Sarhan’s best ideas long before they are highlighted in other publications. In addition, clients receive objective feedback on their own ideas and are alerted each time Sarhan Capital traders buy and sell. Many institutional clients including hedge funds, private family offices, brokerages, registered investment advisers, and corporations, have turned to Sarhan Capital for personalized advisory/consulting services in recent years.

How We Can Help You:

  1. We employ a discretionary long/short global macro strategy that is profitable in both bull and bear markets.
  2. Achieve better results in the market by working with an objective third party who is not an internal “yes” man.
  3. Provide you with sound buy/sell ideas in real-time
  4. Provide objective feedback on your investment ideas and market outlook
  5. Contribute profitable ideas to your investment committee 
  6. All investment ideas are fully transparent, unbiased, and based on market action, not someone’s opinion.
  7. Help create uniformed structure within your organization!

 Contact Us Today To See How We Can Help You!

30 Sep
Daily Market Commentary

Stocks Drift Lower On Last Day Of Q3

Thursday, September 30, 2010
Stock Market Commentary:

Stocks fell on Thursday as investors digested the latest round of economic data and more negative news from Europe was announced. Volume totals were reported higher on the NYSE and on the Nasdaq exchange compared to Wednesday’s session which marked the latest distribution day and signaled that large institutions were aggressively selling stocks. Advancers were about even with decliners on the NYSE and on the Nasdaq exchange, while new 52-week highs easily outnumbered new 52-week lows on both exchanges. There were 77 high-ranked companies from the CANSLIM.net Leaders List made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, slightly higher from the 75 issues that appeared on the prior session.

Economic Data Is Decent But Spain’s Downgrade Hurts Stocks:

Before Thursday’s opening bell, the government released two stronger than expected economic reports which helped lift futures. The Commerce Department said the final read on Q2 GDP was +1.7%, higher than the prior estimate of 1.6%. Elsewhere, the Labor Department said initial jobless claims fell -16,000 to 453,000 last week. At 10:00AM EST, the Chicago PMI topped estimates which helped send stocks higher. In Europe, Spain’s credit rating was cut one level from AAA to Aa1. Had this event occurred three months ago, the euro and major equity markets around the world would have been fallen sharply. Therefore, the somewhat muted decline suggests a strong environment.

Market Action- Confirmed Rally:

The action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been very strong. Looking forward, the window is open for disciplined investors to carefully buy high-ranked stocks, while many pundits are expecting that markets may consolidate following recent gains. It was encouraging to see the bulls show up and defend support (formerly resistance) last week. The next level of support for the major averages is their respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly.

Want Better Results?
Our Private Advisory Services Can Help You!

Sarhan Consulting provides both global macro and equity only consulting services to institutional clients around the world. For years, its clientele has participated in the firm’s objective market-based outlook, which has one primary goal: to provide stable trading ideas across all asset classes. 
Sarhan Capital’s consulting arm allows clients to participate in the idea generation process and be privy to many of Sarhan’s best ideas long before they are highlighted in other publications. In addition, clients receive objective feedback on their own ideas and are alerted each time Sarhan Capital traders buy and sell. Many institutional clients including hedge funds, private family offices, brokerages, registered investment advisers, and corporations, have turned to Sarhan Capital for personalized advisory/consulting services in recent years.

How We Can Help You:

  1. We employ a discretionary long/short global macro strategy that is profitable in both bull and bear markets.
  2. Achieve better results in the market by working with an objective third party who is not an internal “yes” man.
  3. Provide you with sound buy/sell ideas in real-time
  4. Provide objective feedback on your investment ideas and market outlook
  5. Contribute profitable ideas to your investment committee 
  6. All investment ideas are fully transparent, unbiased, and based on market action, not someone’s opinion.
  7. Help create uniformed structure within your organization!

 Contact Us Today To See How We Can Help You!

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