19 May
Daily Market Commentary

Market Remains In A Correction; Day Count Reset

Wednesday, May 19, 2010
Market Commentary:

U.S. stocks fell even as the euro rallied after investors digested a slew of economic data. Volume totals were reported higher on the Nasdaq and the NYSE compared to Tuesday’s total which was not an encouraging sign. Decliners trumped advancers by over a 3-to-1 ratio on the NYSE and the Nasdaq exchange. New 52-week lows outnumbered new 52-week highs on both major exchanges. There were only 3 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.

Important Fundamental Headlines:

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18 May
Daily Market Commentary

Stocks, Euro & Commodities Negatively Reverse As Dollar Soars!

Tuesday, May 18 ,2010
Market Commentary: 

Stocks negatively reversed, opened higher but closed lower, on Tuesday after the Euro plunged to a fresh four year low against the US dollar. Volume totals were reported higher on the Nasdaq and the NYSE compared to Monday’s total which was not an encouraging sign. Decliners trumped advancers by about a 3-to-1 ratio on the NYSE and the Nasdaq exchange. New 52-week highs outnumbered new 52-week lows on both major exchanges. There were 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 7 issues that appeared on the prior session.

Germany Bans Naked Short Selling:

The major averages opened higher but quickly turned tail after the euro plunged to a fresh four year low against the greenback. The big news of the day came out of Germany. Germany placed a temporary ban on naked short selling of euro bonds, banks, and insurers in an attempt to curb the month long decline and ease contagion woes. Germany’s BaFin financial-services regulator said that the plan will be effective midnight and remain in effect until March 31, 2011. This sent the euro plunging below $1.22 for the first time since April 17, 2006. The stronger dollar sent a slew of dollar denominated assets (mainly stocks and commodities) lower. Crude oil negatively reversed and fell -3.5% and closed below $70 a barrel for the first time in months which has negative ramifications on economy.

Market Action- In A Correction:

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17 May
Daily Market Commentary

Stocks End Higher As Crude & Copper Slice Below 200 DMA Lines

Monday, May 17, 2010
Market Commentary:

The major averages closed higher after spending most of the session in the red as crude oil slide below the psychologically important $70 a barrel level and New York’s manufacturing slowed. Volume totals were reported lower on the Nasdaq and the NYSE compared to Friday’s total which was not an encouraging sign. Decliners led advancers by a 23-to-16 ratio on the NYSE and by a very small margin on the Nasdaq exchange.  New 52-week highs outnumbered new 52-week lows on the NYSE but trailed new lows on the Nasdaq exchange. There were only 7 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 3 issues that appeared on the prior session. 

Crude & Copper Break Below 200 DMA Lines:

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14 May
Daily Market Commentary

Week In Review; 50 DMA Line Is Resistance

Friday, May 14, 2010
Stock Market Commentary:

Continuing in their recent trend, the major averages rallied during the first half of the week only to fall hard during the latter half. For the week, volume totals were lower than the prior’s week’s totals which indicated distributional pressure from institutional investors. In addition, all the major averages failed after a light volume rally to their 50 DMA lines which currently serves as formidable resistance. Breadth was negative as decliners trumped advancers by a large margin as the market encountered resistance.

Monday-Wednesday Light Volume Rally To 50 DMA line:

Stocks surged around the world after European policy makers announced a $1 trillion bailout package designed to end the region’s sovereign-debt crisis, curb contagion woes, and save the euro. Initially, the euro opened higher but negatively reversed after the bears showed up and quickly sent the euro lower. The fact that the euro could not rally on bullish news begs the question, when will it rally? By Friday, the euro fell a whopping 7 handles (from 1.30-1.23) and closed near its lows for the week

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13 May
Daily Market Commentary

Stocks Consolidate Recent Move Near 50 DMA Line

Thursday, May 13, 2010
Market Commentary:

The major averages traded between positive and negative territory as the major averages encountered resistance near their respective 50 DMA lines. Volume totals were reported lower on the Nasdaq and on the NYSE compared to Wednesday’s totals, continuing the week long trend of inordinately light volume.  New 52-week highs outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange. New leadership is a critical part of any rally effort, and while disciplined investors are awaiting a follow-through-day from at least one of the major averages it is somewhat reassuring to see the new highs list expanding again.

NY Prosecutors Focus On Mortgage Backed Securities:

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12 May
Daily Market Commentary

Dow & Nasdaq Jump Above 50 DMA Line; Where's The Volume?

Wednesday, May 12, 2010
Stock Market Commentary:

The major averages jumped, extending a week long rally after a flurry of healthy headlines from Europe were released. Volume totals were reported lower on the Nasdaq and on the NYSE compared to Tuesday’s totals which was a bit disconcerting. Advancers led decliners by a 5-to-1 ratio on the NYSE and by a 4-to-1 ratio on the Nasdaq exchange.  New 52-week highs outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange. There were 25 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 19 issues that appeared on the prior session. Waning leadership has been evidenced by the recent lack of stocks making new highs as the rally came under pressure.

Contagion Fears Ease:

Several positive headlines were released from Europe which helped ease contagion woes. The Portuguese bond sale went better than expected, planned budget cuts in Spain and the U.K. went well and EU GDP topped estimates. The EU’s statistics office in Luxembourg said that gross domestic product in the 16 euro nations climbed +0.2% from the fourth quarter, when it remained unchanged. In addition, Germany’s economy unexpectedly grew in the first quarter, helped by rising exports. Interestingly, the news sent US Treasuries and the euro lower as gold and the dollar rose. Gold surged to a fresh record high even as the dollar rallied and the euro flirted with a fresh 2010 low.  

Technicals Are Improving; But Where’s The Volume?

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11 May
Daily Market Commentary

Stocks Encounter Resistance Near 50 DMA Line

Tuesday, May 11, 2010
Market Commentary:

The major averages traded between positive and negative territory but closed mixed to slightly lower after encountering resistance near their respective 50 DMA lines. Volume totals were reported mixed; higher on the Nasdaq and lower on the NYSE compared to Monday’s totals. Advancers led decliners by more than a 21-to-17 ratio on the NYSE, and by a 16-to-11 ratio on the Nasdaq exchange.  New 52-week highs outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange. There were 19 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 7 issues that appeared on the prior session. Waning leadership has been evidenced by the recent lack of stocks making new highs as the rally came under pressure.

Market Closed Below Important Resistance Levels:

All the major averages opened lower, then turned higher, only to pullback after encountering resistance near their respective 50 DMA lines. Last week’s historic sell off left a lot of technical damage on the charts of the major averages and leading stocks. Until the major averages all close above their respective 50 DMA lines then by definition the technical damage will remain intact and the near term trend will be lower.

UK’s New Prime Minister- David Cameron:

In a surprising turn of events, David Cameron was named the new Prime Minister of the United Kingdom after Gordon Brown unexpectedly resigned. Cameron’s new role helped the conservative movement regain power after a 13 year hiatus. David Cameron is believed to be nearing an agreement on forming a coalition government with Nick Clegg’s Liberal Democrats. Negotiators for both their parties met on Tuesday after talks broke down between Brown’s Labour Party and the Liberal Democrats.

Market Action- In A Correction- Day 2 Of A New Rally Attempt:

Tuesday marked Day 2 of the  current rally attempt which means that as long as Monday’s lows are not breached the earliest a proper FTD could emerge will be this Thursday. However, if Monday’s lows are breached, then the day count will be reset. Taking the appropriate action on a case-by-case basis with your stocks prompts investors to raise cash when any holdings get into trouble. Trade accordingly.
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10 May
Daily Market Commentary

Stocks Soar On EU Bailout

Monday, May 10, 2010
Market Commentary:

Stocks surged around the world after European policy makers announced a $1 trillion bailout package designed to end the region’s sovereign-debt crisis and save the euro. Volume totals were reported lighter on both the NYSE and on the Nasdaq exchange compared to Friday’s very high levels. Advancers trumped decliners by more than a 10-to-1 ratio on the NYSE, and by a 7-to-1 ratio on the Nasdaq exchange. New 52-week highs outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange. There were 7 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 0 issues that appeared on the prior session. Waning leadership has been evidenced by the recent lack of stocks making new highs as the rally came under pressure.

Hyperinflation on Europe’s Horizon? The Market Might Think So…

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07 May
Daily Market Commentary

Stocks Plunge As Contagion Fears Spread

Friday, May 07, 2010
Stock Market Commentary:

Stock markets around the world plunged this week as concern spread that Greece’s debt woes will spread to other countries. Volume surged on both the NYSE and on the Nasdaq exchange which illustrates heavy distribution from institutional investors.  Decliners trumped advancers on both major exchanges as the major averages plunged below important levels of support and their well defined one year upward trendlines. New 52-week lows outnumbered new 52-week highs on the NYSE and on the Nasdaq exchange for the first time since February. Waning leadership has been evidenced by the recent lack of stocks making new highs as the rally came under pressure.      

Correction Begins; Stocks Tank:

On Monday, stocks rallied after news spread that the EU and the IMF will bailout Greece. The news sent the EU plunging as fear spread that other EU nations will also need assistance. In the US, billionaire investor, Warren Buffett defended Goldman Sachs Group Inc. (GS) at his annual shareholders meeting in Omaha. Last year, Buffett invested $5 billion in the investment bank and said the bank should not be blamed for losses on lousy mortgage bets. The major averages fell into a correction on Tuesday after the NYSE composite sliced below its 50 DMA line on heavy turnover and the euro plunged to a fresh 14-month low.   On Wednesday, stocks edged lower sending the benchmark S&P 500 and tech-heavy Nasdaq exchange below their respective 50 DMA lines on heavy volume.

Dow Plunges -1000 Points; Major Averages Violate Support:

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06 May
Daily Market Commentary

Flight To Safety; Stocks & Commodities Plunge As Dollar Soars!

Thursday’s May 6, 2010
Stock Market Commentary:

The major averages tanked for the third consecutive day after the euro slid to a fresh 14-month low, gold topped 1,200, and the major averages plunged below important moving averages as concern spread that other European countries might follow in Greece’s ominous footsteps. Volume totals were reported higher on both the NYSE and on the Nasdaq exchange compared to Wednesday’s totals, briefly sending all the major averages below their respective 50 and 200-day moving average (DMA) lines. Decliners trumped advancers by approximately a 10-to-1 ratio on the NYSE and by a 7-to-1 ratio on the Nasdaq exchange. New 52-week lows outnumbered new 52-week highs on the NYSE and on the Nasdaq exchange. There were only 6 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 number that appeared on the prior session. Waning leadership has been evidenced by the recent lack of stocks making new highs as the rally came under pressure.

Flight To Safety Sends Stocks Plunging:

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