Saturday, November 14, 2009

Review of Friday's Price Action

The Power Zones and the VWAP are included from the previous Day Session.
This was a Consolidation Day after a Trend Day yesterday.
Setups are circle in red.The Entry technique is another process that must be executed with presicion to keep the risk down to a maximun of one point or four ticks.
The Live Performance Statement is available in Twitter.
Financial Press Overview:
The newest US consumer sentiment reports came out on Friday, and they were poor, showing an unexpected tumble. In early November, consumer confidence waned, coming in at its weakest level in three months. The Reuters/University of Michigan Surveys of Consumers pegged its (preliminary) sentiment indicator for November at a reading of 66.0 (October's value had been a significantly higher reading of 70.6); meanwhile, economists had been expecting the latest reading to come in at 71.0. The accompanying Reuters statement suggested that '.... importantly, the decline in confidence was already in place before the announced increase in the unemployment rate to 10.2 percent on November 6'.
In housing-related news, the National Association of Realtors see home prices across the US improving in 2010, increasing by an estimated 4%. Furthermore, home resales should also keep rising in conjunction with the anticipated continuing housing market recovery. Specifically, home resales for 2010 are currently projected to reach 5.7 million while mortgage rates are estimated to average roughly 5.7%.
The major indexes recovered smartly yesterday from yesterday's lone slide, although they pulled back strongly later in the session. The up-move was precipitated by renewed US dollar weakness (prompted by the largest increase in a decade in the US trade deficit), strong earnings from Walt Disney (which reported a rise in both quarterly profit and revenue), and better-than-expected results from a number of retailers (including J.C. Penney and Abercrombie & Fitch).
It is interesting to point out (as some skeptic market observers have) that Friday's rally occurred on the heels of a much worse than expected reading on consumer sentiment. Some market observers use this as yet another example of a growing disconnect between Wall Street and Main Street, calling the current rally nothing more than an increasingly irrational momentum trade where technical aspects (cheap money, low interest rates, a sagging US dollar) are overshadowing poor underlying fundamentals, for now continuing to provide a strong tailwind for the bulls.

No comments:

Post a Comment