Thursday, December 2, 2010
Stock Market Commentary:
Stocks and a slew of commodities rallied after the USD fell and the euro rallied as the latest economic data in the US topped estimates and the ECB said it was buying bonds. The market is still in a correction according to outside sources which means a new proper FTD needs to emerge in order to confirm a new rally.
Euro Woes Ease, US Economic Data Is Strong:
On Thursday, the European Central Bank (ECB) said that it delayed its withdrawal of emergency aid and liquidity and bought more government bonds to help allay contagion woes. ECB President Jean-Claude Trichet said he plans to fight “acute” financial market tensions and made it clear that the ECB would actively try to stem the ongoing debt crisis. In the US, stocks rallied after retail sales and housing data suggested the current recovery was on track.
Market Action- Correction Enters Week 3
It is encouraging to see the bulls show up this week and defend the 50 DMA lines for the major averages. Wednesday marked Day 1 of a new rally attempt for the Dow Jones Industrial Average and the benchmark S&P 500 which means the earliest a possible FTD could emerge for those indices is Monday. Meanwhile, the tech-heavy Nasdaq composite and small-cap Russell 2000 indexes marked Day 10 of their respective rally attempts which means the window remains open for either of those two indices to score a proper FTD. Trade accordingly.
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