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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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.

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  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.
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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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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!

20 Sep
Daily Market Commentary

Summer Highs Are Breached, Next Stop; April's Highs

Monday, September 20, 2010
Stock Market Commentary:

Stocks rallied around the world and extended their three week rally after positive data was released from the ailing housing sector and the latest multi-billion dollar merger was announced. As expected, volume was reported lower on the NYSE and on the Nasdaq exchange compared to Friday’s heavy options inflated levels. Advancers trumped decliners by over a 4-to-1 ratio on the NYSE and by nearly a 4-to-1 ratio on the Nasdaq exchange. New 52-week highs easily outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange. There were 101 high-ranked companies from the CANSLIM.net Leaders List made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, nicely higher than the 59 issues that appeared on the prior session.

Latest M&A News, Housing Sentiment Is Weak But Lennar Earnings Offset Housing Woes:

Stocks opened higher after Lennar Corp.(LEN +8.22%) reported solid earnings that topped estimates and International Business Machines Corp (IBM +1.23%) announced a $1.7 billion takeover. Lennar’s stronger than expected earnings helped allay concerns that the ailing housing market is deteriorating. The stronger earnings helped offset a weaker than expected report from the National Association of Home Builders that showed home builders’ confidence remained unchanged at 13. September’s reading  matched an 18-year low.

Market Action- Confirmed Rally:

The action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been 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 is very encouraging to see the major averages and several leading stocks break above stubborn resistance levels and continue marching higher. All the major averages rallied and managed to stay above their respective 200-day moving average (DMA) lines last week, which is another encouraging sign. Now that the summer highs are breached, the next important resistance level for the major averages are their respective April highs.

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17 Sep
Daily Market Commentary

Stocks Rally For 3rd Straight Week

Friday, September 17, 2010
Stock Market Commentary:

Stocks enjoyed their third weekly gain and closed near their summer highs as investors digested a slew of economic data. Volume was reported higher on the NYSE and on the Nasdaq exchange compared to Thursday’s levels due to options expirations. Advancers led decliners by about a 3-to-2 ratio on the NYSE and by about a 4-to-3 ratio on the Nasdaq exchange. New 52-week highs easily outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange. There were 59 high-ranked companies from the CANSLIM.net Leaders List made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 48 issues that appeared on the prior session.

Monday & Tuesday’s Action; Stocks Rally On New Bank Rules (Basel III):

On Monday, stocks surged around the world after bank regulators met in Basel Switzerland over the weekend and passed a new set of capital rules for banks. The new agreement now known as “Basel III” set new capital requirements for banks around the world. The new standards are viewed as bullish for the ailing financial industry as they help prevent excessive leverage which threatened the global financial system in 2008. On Tuesday, stocks ended mixed after August’s retail sales topped estimates and gold surged to a fresh all-time high. Stocks in Europe were under pressure before Tuesday’s open after a report showed economic growth in the Euro zone was slowing. In the US, retail sales topped estimates and rose by the largest pace in five months. The Commerce Department said total retail sales swelled by +0.4% following a revised +0.3% rise in July. This was the second consecutive monthly gain and bodes well for the economic recovery. 

Wednesday- Friday’s Action; Stocks Drift Higher And Close Near Resistance (Summer Highs):

Continue reading

16 Sep
Daily Market Commentary

Stocks End Mixed On Busy News Day

Thursday, September 16, 2010
Stock Market Commentary:

Stocks spent most of the day in the red but closed mixed and near their intraday highs after a slew of economic data was released. Volume was reported even on the NYSE and lower on the Nasdaq exchange compared to Wednesday’s levels. Decliners led advancers by a 3-to-2 ratio on the NYSE and by an 8-to-5 on the Nasdaq exchange. New 52-week highs easily outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange. There were 48 high-ranked companies from the CANSLIM.net Leaders List made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 46 issues that appeared on the prior session.

UK Retail Sales & FedEx Dismal Forecast Hurt Stocks:

Stocks opened lower after the latest round of economic data suggests the economic recovery may be slowing. However, the bulls showed up and defended the major averages 200 DMA line for the fourth consecutive session. U.K. retail sales fell and FedEx Corp. (FDX -3.75%), the second-largest package-shipping company, lowered their profit forecasts which fell short of analyst estimates and bodes poorly for the economic recovery. FDX gapped down and sliced below its longer term 200 DMA line on Thursday as volume swelled. Meanwhile, a slew of housing stocks were smacked after home seizures surged to a record level.

Investors Digest: PPI, Jobless Claims, Philly Economic Index, and Poverty Rate:

 In other news, the producer price index (PPI) rose +0.4%, topped estimates, and was the largest increase in five months. The reading was twice as large as July’s total. Core prices, which exclude food and energy rose +0.1%. Elsewhere, the Labor Department said, weekly jobless claims fell by -3,000 to +450,000 last week which was lower than the Street’s forecast for +459,000. Finally, the Federal Reserve Bank of Philadelphia released its general economic index which rose to negative -0.7 this month. It was much higher than August’s reading of -7.7. In a separate report, the government said that the country’s poverty rate vaulted to +14.3% in 2009 which was the highest level since 1994, and the 43.6 million Americans in need is the largest reading in 51 years of record-keeping! This translates to approximately 1 in 7 Americans are living in poverty.The fact that more people, not less, have fallen into poverty is another negative data point for the struggling recovery.

Market Action- Confirmed Rally:

Overall, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) remains healthy. Looking forward, the window is now open for disciplined investors to begin carefully buying high-ranked stocks again. It was encouraging to see a flurry of high-ranked leaders trigger fresh technical buy signals and break out of sound bases in recent weeks. All the major averages rallied above their respective 200-day moving average (DMA) lines this week, which is another encouraging sign. The next important resistance level the major averages are facing is their respective summer highs.

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14 Sep
Daily Market Commentary

Stocks Consolidate Monday's Large Move

Tuesday, September 14, 2010 
Stock Market Commentary

Stocks ended mixed after August’s retail sales topped estimates and gold surged to a fresh all-time high. Tuesday’s volume totals were reported about even on the NYSE and higher on the Nasdaq exchange compared to Monday’s levels. Decliners led advancers by a small margin on the NYSE and on the Nasdaq exchange. New 52-week highs easily outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange. There were 69 high-ranked companies from the CANSLIM.net Leaders List made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, lower than the 77 issues that appeared on the prior session.

Slower Growth in Europe Hurts Stocks:

Stocks in Europe were under pressure before Tuesday’s open after a report showed economic growth in the Eurozone was slowing. In the US, retail sales toppped estimates and rose by the largest pace in five months. The Commerce Department said total retail sales swelled by +0.4% following a revised +0.3% rise in July. This was the second consecutive monthly gain and bodes well for the economic recovery.  

Market Action- Confirmed Rally:

Tuesday’s action was considered normal after Monday’s large move. Overall, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) remains healthy. Looking forward, the window is now open for disciplined investors to begin carefully buying high-ranked stocks again. It was encouraging to see a flurry of high-ranked leaders trigger fresh technical buy signals and break out of sound bases in recent sessions. All the major averages jumped above their respective 200-day moving average (DMA) lines today which is another encouraging sign. The next important level to watch for the major averages are their summer highs.  It is important to note that approximately 75% of FTDs lead to new sustained rallies, while 25% fail. In addition, every major rally in market history has begun with a FTD, but not every FTD leads to a new rally. Trade accordingly.

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