02 Jul
Daily Market Commentary

Tough Week On Wall Street

Friday, July 2, 2010
Stock Market Commentary:

It was a dismal week on Wall Street as the latest rally failed, the major averages violated support, and fell to fresh 2010 lows. As expected Friday’s pre-holiday volume totals were reported lower on the NYSE and the Nasdaq exchange compared to Thursday’s levels. Decliners led advancers by a 10-to-9 ratio on the NYSE and by a 16-to-11 ratio on the Nasdaq exchange. There were only 4 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, the same reading as the prior session. Meanwhile, new 52-week lows substantially outnumbered new 52-week highs on the NYSE and the Nasdaq exchange. As leadership evaporated in recent sessions, in this commentary it was repeatedly noted – “Without a healthy crop of leaders hitting new highs it is hard for the major averages to sustain a rally.”
Monday-Wednesday’s Action; Stocks Fall Hard During Q2:
Stocks closed lower on Monday after a relatively benign G-20 meeting. The G-20 met in Toronto and pledged to cut deficits in order to help stabilize the global economy. Elsewhere, US consumer spending and personal income rose. On Tuesday, stocks fell hard across the globe after concern spread that China’s robust economy was slowing. China’s leading economic indicators fell and Citigroup (C) said China’s exports will face “strong headwinds” in the second half of the year due to stricter measures from Beijing and the ongoing European debt crisis. US stocks continued to fall after US consumer confidence tanked in June. The Conference Board’s index of consumer confidence fell to 52.9 from May’s revised reading of 62.7. The dismal labor market was cited as a primary cause for the ongoing malaise. Elsewhere, the S&P/Case-Shiller index of home prices rose +3.8% from April 2009 which was the largest year-over-year gain since September 2006.
The second quarter ended on Wednesday sending the Nasdaq Composite and the benchmark S&P 500 Index both fell -12% while the Dow Jones Industrial Average and the small cap Russell 2000 Index skidded –10%, marking their worst quarters since Q4 2008. It was the tech-heavy Nasdaq’s worst second quarter since 2002. In addition, it was worrisome to see the S&P 500 close below 1,040 which has served as formidable support for most of the year. 

Thursday-Friday’s Action; Jobs Fall -125,000 Jobs Last Month:

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01 Jul
Daily Market Commentary

Stocks End Near Highs; Economic Data Weak

Thursday, July 1, 2010
Stock Market Commentary:

Stocks, commodities and the dollar fell after a series of lackluster economic data sparked concern that the global economic recovery is faltering. Thursday’s volume totals were reported higher on the NYSE and the Nasdaq exchange compared to Wednesday’s levels. Decliners led advancers by a 23-to-16 ratio on the NYSE and by a 9-to-5 ratio on the Nasdaq exchange. There was only 1 high-ranked company from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, lower from the 4 issues that appeared on the prior session. Meanwhile, new 52-week lows substantially outnumbered new 52-week highs on the NYSE and the Nasdaq exchange. As leadership evaporated in recent sessions, in this commentary it was repeatedly noted – “Without a healthy crop of leaders hitting new highs it is hard for the major averages to sustain a rally.”

Lackluster Economic Data Sparks A World Wide Sell Off:

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30 Jun
Daily Market Commentary

Stocks In The Red For Q2 & 2010

Wednesday, June 28, 2010
Stock Market Commentary:

The major averages ended lower on the final day of the second quarter as European debt woes threatened the global economic recovery. The widespread losses coupled with the ominous technical damage effectively ended the latest confirmed rally which began with the June 15, 2010 follow-through day (FTD). Wednesday’s volume totals were reported lower on the NYSE and the Nasdaq exchange compared to Tuesday’s levels. Decliners trumped advancers by over a 2-to-1 ratio on the NYSE and the Nasdaq exchange. There were only 2 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, lower than the 15 issues that appeared on the prior session. Meanwhile, new 52-week lows substantially outnumbered new 52-week highs on the NYSE and the Nasdaq exchange. As leadership evaporated in recent sessions, in this commentary it was repeatedly noted – “Without a healthy crop of leaders hitting new highs it is hard for the major averages to sustain a rally.”
Q2 & 2010 Results For the Major Averages:
It was a brutal quarter on Wall Street. The Nasdaq composite and the benchmark S&P 500 index both fell -12% while the Dow Jones Industrial Average and the small cap Russell 2000 index skidded –10%, for their worst quarter since Q4 2008. It was the Nasdaq’s worst second quarter since 2002. For the year, The Nasdaq composite is down -7%, the S&P 500 fell -7.8% and the Dow Jones Industrial Average fell -6%. In addition, it was worrisome to see the S&P 500 close below 1040 which heretofore, served as formidable support for most of the year.

Tepid Economic Data Weighs On Stocks:

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29 Jun
Daily Market Commentary

Stocks Retest Support As The Dollar Advances

Tuesday, June 29, 2010
Stock Marke Commentary:

The major averages got smacked sending the S&P 500 index below its 2010 lows of 1,040. The widespread losses coupled with the ominous technical damage effectively ended the latest rally which began with the June 15, 2010 follow-through day (FTD). Tuesday’s volume totals were reported higher on the NYSE and the Nasdaq exchange compared to Monday’s levels which marked the latest distribution day for the major averages. Decliners trumped advancers by over a 7-to-1 ratio on the NYSE and over an 8-to-1 ratio on the Nasdaq exchange. There were only 2 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, lower than the 15 issues that appeared on the prior session. Without a healthy crop of leaders hitting new highs it is hard for the major averages to sustain a rally. New 52-week lows outnumbered new 52-week highs on the NYSE and the Nasdaq exchange.

China Slowdown & Poor US consumer Sentiment Drags Stocks Lower:

Stocks fell hard across the globe after concern spread that China’s robust economy is slowing. China’s leading economic indicators fell and Citigroup (C) said China’s exports will face “strong headwinds” in the second half of the year due to stricter measures from Beijing and the ongoing European debt crisis. This sent the Shanghai Composite Index diving -4.3% to 2,427.05 which was the largest single day decline since May 17 and the lowest close in 14 months.
US stocks continued to fall after US consumer confidence tanked in June. The Conference Board’s index of consumer confidence fell to 52.9 from May’s revised reading of 62.7. The dismal labor market was cited as a primary cause for the ongoing malaise. Elsewhere, the S&P/Case-Shiller index of home prices rose +3.8% from April 2009 which was the largest year-over-year gain since September 2006. The report also showed that home prices in 20 major US cities rose in April from a year earlier as sales got a boost from the now-expired tax credit.

Market Action- In A Correction:

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28 Jun
Daily Market Commentary

Stocks Drift Lower After Blasé G-20 Meeting

Monday, June 28, 2010
Stock Market Commentary:

The major averages ended lower after the G-20 pledged to cut deficits in order to help stabilize the global economy and US consumer spending and personal income rose. The current rally is under pressure after the major averages fell back below their respective 200 DMA lines and suffered a series of ominous distribution days. On Monday, volume totals were reported lower on the NYSE and the Nasdaq exchange compared to Friday’s levels which were inflated due to the annual re-balancing in the small cap Russell 2000 Index. Decliners led advancers by a 20-to-17 on the NYSE and a 16-to-11 ratio on the Nasdaq exchange. There were only 15 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 9 issues that appeared on the prior session. Leadership has evaporated, and without a healthy crop of leaders hitting new highs it is hard for the major averages to sustain a rally. New 52-week highs outnumbered new 52-week lows on the NYSE but trailed on the Nasdaq exchange.

G-20 More Rhetoric, Less Action:

Over the weekend, G-20 leaders met in Toronto and pledged to cut their soaring deficits but failed to reach an agreement on an international bank tax. Advanced G-20 economies have agreed to cut their deficits by nearly -50% over the next three years in order to stabilize their debt-to-output ratios by 2016. Leaders said nations can move at their own pace and also pledged to fulfill existing stimulus plans. Before Monday’s opening bell, the Commerce Department said consumer spending rose +0.2% which topped the Street’s estimate. Elsewhere, personal incomes rose +0.4% and the savings rate jumped to the highest level this year.

S&P 500 Down -7.4% in Q2:

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25 Jun
Daily Market Commentary

Week In Review: Stocks Negatively Reverse And Close Below 200 DMA lines

Friday, June 25, 2010
Stock Market Commentary:

The major averages negatively reversed (opened higher and closed lower) this week after encountering resistance near their respective 50 DMA lines. The current rally is under pressure after the major averages fell back below their respective 200 DMA lines and suffered a series of ominous distribution days. On Friday, volume totals were reported higher on the NYSE and the Nasdaq exchange compared to Thursday’s levels due to the rebalancing in the small cap Russell 2000 index. Advancers trumped decliners by more than a 2-to-1 on the NYSE and on the Nasdaq exchange. There were only 9 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 2 issues that appeared on the prior session. Leadership has evaporated, and without a healthy crop of leaders hitting new highs it is hard for the major averages to sustain a rally. New 52-week highs outnumbered new 52-week lows on the NYSE but trailed on the Nasdaq exchange.

Monday & Tuesday’s Action- Stocks Encounter Resistance At 50 DMA line:

Stocks opened sharply higher on Monday but closed lower after The People’s Bank of China pledged on June 19 to make the yuan more flexible. The major averages negatively reversed after encountering resistance near their respective 50 DMA lines and spent the week pulling back. On Tuesday, both the Dow Jones Industrial Average and the benchmark S&P 500 Index close below their respective 200 DMA lines only one week after the latest follow-through day (FTD) confirmed a new rally. In our view, this put the latest rally under pressure and suggested lower prices may likely follow. The selling accelerated after the National Association of Realtors said sales of previously owned homes fell -2.2% last month and the euro fell for a second consecutive day.

Wednesday-Friday’s Action: Tepid Economic Data Drags Stocks Lower

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24 Jun
Daily Market Commentary

Stocks Get Smacked On Lackluster Economic Data

Thursday, June 24, 2010
Stock Market Commentary:

The major averages got smacked on Thursday sending the benchmark S&P 500 Index to its longest losing streak in seven weeks, dragged lower by the ailing  financial sector and the latest round of tepid economic data. Volume totals were reported higher on the NYSE and the Nasdaq exchange compared to Wednesday’s levels which marked the latest distribution day and suggests large institutions are aggressively selling stocks. Decliners trumped advancers on the NYSE and on the Nasdaq exchange. There were only 2 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, barely higher than the 1 issue that appeared on the prior session. Leadership has evaporated, and without a healthy crop of leaders hitting new highs it is hard for the major averages to sustain a rally.  New 52-week highs outnumbered new 52-week lows on the NYSE but trailed by a large margin on the Nasdaq exchange.

Lackluster Economic Data Rocks The Market:

Before Thursday’s opening bell, two separate government reports showed unemployment claims fell from a two-month high while durable-goods orders excluding transportation rose slightly. The Labor Department said weekly jobless claims (i.e. the number of Americans applying for jobless benefits) slid by -19,000 to 457,000 in the week ended June 19. Elsewhere, the Commerce Department said durable goods, goods meant to last at least three years, excluding autos and aircraft, rose in May for the third time since February 2010. However, the overall reading was down -1.1%. The fact that the major averages sold off on the news suggests investors were not pleased with the results. After the close, both Oracle (ORCL) and Research In Motion (RIMM) posted their latest quarterly results which sent ORCL higher and RIMM lower in after hours trade.

Market Action- Rally Under Pressure:

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23 Jun
Daily Market Commentary

Another Volatile Session On Wall St As Investors Digest Awful Housing Data & Latest Fed Meeting

Wednesday, June 22, 2010
Stock Market Commentary:

It was another volatile day on Wall Street as investors digested dismal housing data and the Fed left rates unchanged as the economy continues to recover from the worst financial crisis since the Great Depression. Volume totals were about even on the NYSE and slightly higher on the Nasdaq exchange compared to Tuesday’s levels. Decliners led advancers by approximately nearly an 11-to-9 ratio on the NYSE and by a 7-to-6 ratio on the Nasdaq exchange. There was only 1 high-ranked company from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, sharply lower than the 12 issues that appeared on the prior session. Without a healthy crop of leaders hitting new highs it is hard for the major averages to sustain a rally.  New 52-week highs outnumbered new 52-week lows on the NYSE but trailed on the Nasdaq exchange.

Dismal Housing Data Spooks Investors; Fed Holds Rates Steady:

The major averages spent the first half of the session in the red after new-home sales plunged to a record low. The Commerce Department said purchases of new homes plunged nearly -33% to an annual pace of 300,000 last month as the government’s tax credit expired. The report also showed that the median home price slid to just over $200,000 and prior months readings were downwardly revised. The overtly weak reading left many to question the healh of the already fragile economic recovery. In addition, anyone watching housing stocks in recent weeks should now expect dismal news (possibly a double dip on the ailing housing market) to continue in the near future. Around 2:15pm EST, the Federal Open Market Committee held rates unchanged at a record-low range of 0-to-0.25%. Fed officials reiterated their pledge to hold rates at a record low for an “extended period” and signaled that European contagion woes may adversely affect US economic growth.

Market Action- Rally Under Pressure:

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22 Jun
Daily Market Commentary

Stocks Close Below 200 DMA Line

Tuesday, June 22, 2010
Market Commentary:

The major averages negatively reversed for a second straight day as the dollar rallied which put pressure on the current rally. It was disconcerting to see both the Dow Jones Industrial Average and the benchmark S&P 500 close below their respective 200 DMA lines only one week after the latest follow-through day (FTD) emerged. Volume totals were reported about even on the NYSE and slightly higher on the Nasdaq exchange compared to Monday’s levels which marked a distribution day and suggested large institutions are selling stocks. Decliners led advancers by over a 3-to-1 ratio on the NYSE and on the Nasdaq exchange. There were 12 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, lower than the 50 issues that appeared on the prior session. New 52-week highs outnumbered new 52-week lows on the NYSE but trailed on the Nasdaq exchange.

Existing Home Sales Fall & Oil Spill Drama Continues To Unfold:

Stocks opened higher but closed lower after the National Association of Realtors said sales of previously owned homes fell -2.2% last month and the euro fell for a second consecutive day. Elsewhere, the Obama administration said it would appeal a Louisiana judge’s verdict to overthrow the six-month ban on new deep-water drilling projects.

Market Action- Rally Under Pressure:

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21 Jun
Daily Market Commentary

US Stocks Negatively Reverse After China's Currency Becomes More "Flexible"

Monday, June 21, 2010
Stock Market Rally:

The major averages negatively reversed (opened higher and closed lower) after The People’s Bank of China pledged on June 19 to make the yuan more flexible. As expected, volume totals were reported lower on both major exchanges due to Friday’s quadruple witching day. Decliners led advancers by a 22-to-17 ratio on the NYSE and by a 2-to-1 ratio on the Nasdaq exchange. There were 50 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 33 issues that appeared on the prior session.  New 52-week highs outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange.

China Allows Its Yuan To Be More “Flexible”:

Overnight, Asian and European equities soared after China said it will allow its currency, the yuan, to be more flexible against the US dollar. Since the 2008 financial crisis, the yuan has been artificially pegged to the US dollar to protect Chinese exporters. During that time, a slew of Western governments, including the US, have pressured Beijing to remove the onerous peg but each time Beijing has dismissed their requests. It is important to note that China’s economy is experiencing explosive growth and Beijing has taken several key measures in recent years to curb that robust growth. Allowing the yuan to be more flexible is simply another calculated measure to achieving that goal.  

Yuan Sparks Global Rally But US Stocks End Lower:

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