Archive for September, 2010

Signs Of A Market Breakout

Tuesday, September 14th, 2010

The S&P 500

While nothing is ever certain until it happens, the stock market appears to be ready for a major breakout from its recent short-term trading range.

If the S&P 500 closes above the upper resistance level of 1131.00, we should see additional money flow into the stock market, which will boost stock prices further.

The S&P appears positioned to break out, having rallied 6.9% over the last nine trading sessions.  While the month is not over, the market weakness historically seen in September has not played out this year.  And with this being an options expiration week, there is an added positive bias to the market.

You may have noted that consumer sentiment was incredibly low at the end of August, but the market, of course, typically reacts in the opposite way from what investors are feeling.  So if you’ve put a lot of your portfolio into cash in anticipation of a buying opportunity, this may be it.

Payrolls Up Just In Time For Labor Day Weekend

Friday, September 3rd, 2010

The stock market was given another boost by better-than-expected economic data today, with an August jump of 67,000 jobs in the private sector.  Overall, non-farm payrolls declined by 54,000, but that was primarily due to the elimination of 114,000 temporary jobs created for the federal census. 

S&P index futures rallied over 14 points on the news. And with demand for stocks increasing, both 10- and 30-year Treasury bonds continue to sell off from their lofty levels and yields are moving up for the second day in a row.

While the data still shows a fragile economy, a double-dip recession seems increasingly less likely.  Building off of 1080 on the S&P 500 will be important to establish a short-term trend. All eyes will be focused on next week’s economic calendar and whether the market can continue its uptrend.

Double Dip Less Likely

Thursday, September 2nd, 2010

Global equities are starting the month off on a positive note. The August Chinese Purchasing Managers’ report came in with better-than-expected results, as did Australia’s Gross Domestic Product. In the U.S., the August Institute for Supply Management’s ISM Manufacturing Index came in at 56.3, up from the prior month’s 55.5. All three economic reports provided a catalyst for the U.S. stock market to close above two prior resistance areas and help ease concerns of a double dip recession.