Financial Markets FLASH Report

Financial Markets FLASH Report

March 10
Stocks had a very good day again today as the bull market continues to roar. The DOW only closed up 3 points but this is a very misleading statistics as all the other major averages showed more impressive gains.

Market internals were strong again as 2,040 issues advanced and 984 issues declined. The NASDAQ and Small-Cap Russell 2000 gained over three quarters of a percent and volume was very heavy today at 1.14 billion shares, a very bullish sign that stocks are advancing now on heavier volume.

The market, as measured by the S&P500, has now been up 17 out of the last 23 days and 10 out of the last 11. We have had streaks like this before. At the last high in January, we were up nine out of 10 days before the major decline set in. Fifteen up days out of 18 happened during that same January topping action.

As a matter of fact, to show you how powerful this move has been, since the July lows at 869 on the S&P500, we have had 168 trading days and of these, 106 have been up days. That is 63 percent. This is indicative of bull markets and is no surprise.

It appears that we are still on track to run this market higher.

David Nielsen
President & Founder
Big Wave Advisors
630-682-5520
www.bigwaveadvisors.com
www.bigwaveresearch.com
Send comments to: dave@bigwaveadvisors.com

March 9
Stocks were up over 55 points before some selling came in. The DOW closed up 12 points to stand at 10,564. Volume was better than it has been recently, with 1.1 billion shares changing hands, and market internals were strong with 1,738 issues advancing and 1,312 issues declining. There was not a lot of news to get things moving and that contributed to the narrow range in trading.

One weakness we see now is market leadership. AIG, Citigroup, Fannie Mae and Freddie Mac lead the market today on heavy volume. The one thing bulls do not want to see is these four, basically bankrupt, entities become the market leaders. This is not the type of leadership you see at the beginning of a new bull move. As a matter of fact, it is exactly the type of leadership you see near the end of a move.

The market is breaking out price-wise to the upside, which means we need to see this breakout accompanied by rising bullish volume and solid company leadership. We did not get that today so the rest of this week will be a test to see how strong the underlying pillars are to this advance.

David Nielsen
President & Founder
Big Wave Advisors
630-682-5520
www.bigwaveadvisors.com
www.bigwaveresearch.com
Send comments to: dave@bigwaveadvisors.com

March 5
Stocks exploded to the upside following a very positive February employment report. The report showed the economy on a definite growth trend and analysts are looking for a positive jobs report in April and employment steadily increasing throughout the rest of 2010.

Consumers are spending as retail sales were excellent and this afternoon, consumer credit expanded for the first time in over a year. The economy is back and coming on very strong. 2010 is shaping up to be an excellent year for business and the markets.

The DOW closed up over 122 points to stand at 10,566. The small cap Russell index as well as the NASDAQ both made new 2010 highs and the DOW and S&P we think will hit new highs Monday. Advancing issues swamped declining issues by a 6 to 1 margin and volume was decent with 1.04 billion shares changing hands.

There is no doubt that bad news has no effect on stocks prices and good news just propels them higher. This is the definition of a bull market and this market is entering the first leg up in a new bull phase. We think prices should make new highs fairly quickly and then we think the DOW moves through 11,000 and quickly up to 12,000 as the bad news continues to get ignored.

Stocks will decline and the bull market will end when the FED starts to raise interest rates in earnest. We don’t see this happening for a long period of time. Both stocks and commodities will continue their bull runs.

David Nielsen
President & Founder
Big Wave Advisors
630-682-5520
www.bigwaveadvisors.com
www.bigwaveresearch.com
Send comments to: dave@bigwaveadvisors.com

March 3
Stocks did something today that they haven’t done over the last week, which was to close lower. The DOW closed down 9 points to stand at 10,396. Volume was extremely light at only 936 million shares, making it one of the lightest trading days of the year. Market internals were pretty decent with 1,641 advancing issues and 1,368 decliners.

This light volume is starting to become a worry for traders as they want to see it increase, especially on up days, to confirm the new bull market. Light volume on up days, and heavier volume on down days is not a characteristic of strong markets. We have been seeing very weak volume over the last two weeks, so this has to change soon for traders to continue to buy stocks.

Tomorrow will be continuing claims and Friday is the big employment report. The street is looking for a decrease in nonfarm payrolls of 75,000.

If the report comes in better than expected and the regular Monday up day combines with a strong Friday, I think new 2010 highs will be seen across all markets and the DOW will be headed for 11,000 by mid month. The leg up in this bull market depends on the numbers on Friday. It will be a big, important report.

David Nielsen
President & Founder
Big Wave Advisors
630-682-5520
www.bigwaveadvisors.com
www.bigwaveresearch.com
Send comments to: dave@bigwaveadvisors.com

March 1
Stocks powered ahead on another up Monday, the 21st up Monday out of the last 25, for an 84 accuracy rate, as the DOW closed up 78 points, again above 10,400. This bull market is gaining strength each and every day and it looks like we are headed much higher over the next few weeks and months. There are plenty of bears out there but they are all losing money and the short-side traders are getting massacred. This covering of shorts is helping to fuel the rally and it looks like nothing can stop people from buying stocks.

Bad news, bad economic reports,and a sharply rising dollar have no effect on stocks. Where this would normally be bearish for equities, in this market traders have cast a deaf ear to bad news and economic troubles and have only one goal and that is to keep stocks racing higher. This market reminds me a great deal of the 1999 NASDAQ bubble where every day was filled with bad news and overrated and overvalued stocks but the index kept pushing higher. Stocks today act and feel the same way.

So does that mean a crash is coming. I think the answer is absolutely. When any market ignores fundamentals and values, and starts to move in a bubble fashion, that market will eventually crash. When will it crash? Who knows, it could be next week, it could be next year, but when the end finally comes, it will be ugly. But looking at the action over the past few weeks, it doesn’t appear a meaningful decline is anywhere near and won’t happen for a long time.

Volume today was very light at under 1 billion shares and that is a negative for the market. Market internals were strong with 2,424 issues advancing and 627 issue declining.

Enjoy the ride while it lasts. This could be a big top forming and as we remember from the 1999-2000 NASDAQ market, the top can take a while to form and the last 20 percent move is straight up and of short duration.

Be careful out there. Risk is at an extreme.

David Nielsen
President & Founder
Big Wave Advisors
630-682-5520
www.bigwaveadvisors.com
www.bigwaveresearch.com
Send comments to: dave@bigwaveadvisors.com

Posted on Wednesday, March 10, 2010 (Archive on Wednesday, March 17, 2010)
Posted by jstoltz Contributed by jstoltz

Return