January 10, 2012 at 09:31 AM EST
Resistance At 200-day M.A. Left Behind?
Tuesday, January 9, 2012. 9.25 a.m. The widespread concerns that the market’s impressive rally from its October low might be stopped by the potential important resistance at the 200-day m.a. is looking increasingly unlikely. The concerns are understandable. Another failure at the 200-day m.a. could mean the summer correction, in which the S&P 500 plunged [...]

Tuesday, January 9, 2012. 9.25 a.m.

The widespread concerns that the market’s impressive rally from its October low might be stopped by the potential important resistance at the 200-day m.a. is looking increasingly unlikely.

The concerns are understandable. Another failure at the 200-day m.a. could mean the summer correction, in which the S&P 500 plunged 20%, was the first leg down of a new bear market, and the rally off the October low is just a bear market rally.

As I’ve been showing you, the Dow broke through the resistance and closed at successive new rally highs, and is now 443 points, or 3.7% above the m.a., probably enough to consider a break out.

11012b

But the S&P 500 and Nasdaq have been lagging.

However, it is looking increasingly like they may well follow the Dow and indicate that the three-year bull market from the March, 2009 bottom remains intact.

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Eurozone Tensions Easing?

I’ve been saying since our buy signal in October “if only we could ignore Europe”.

On top of everything else (the market’s upside reversal in October, the increasing momentum of the U.S. economic recovery, etc.) is that actually beginning to happen, that the Eurozone crisis will fade into the background some, as it has repeatedly done over the last two years, allowing the bull market from 2009 to continue?

The Dow Jones Newswire carried an interesting item late yesterday ‘Credit Tensions Seen On The Wane in Europe’.

Some of its points:

“Eurodollar futures contracts settled broadly higher in a relatively quiet trading session, a sign that investors see lower odds for an abrupt freeze-up in lending among European banks.”

“You’re seeing a general trend toward easing of credit pressures in the New Year,” said Nick Kalivas of Hadrian Partners Ltd., a New York research firm.”

“A more positive tone has come over the sector in recent weeks, with participants noting improved conditions in swap markets and rising stock indexes, indicative of investors’ willingness to put more money at risk, as European Union officials work to contain fiscal problems, and economic conditions show signs of improving in the U.S.”

A Big Thank-you to:

Dan Sullivan, editor of The Chartist; Joseph Shaefer, Chief Investment Officer of Stanford Wealth Management and editor of Investors Edge; and Dave Robinson, editor of The Bull & Bear Financial Report, for coverage and recognition of our work and opinions.

And a very special thank you to subscribers for all the Christmas cards and thank-you letters. They were much appreciated. 

To read my weekend newspaper column ‘Can The U.S. Economic Recovery Overcome Europe’s Drag? Click here.

Subscribers to Street Smart Report: In addition to the charts and updates in the ‘premium content’ area of this blog this morning, there is an in-depth signals and recommendations report on ‘Gold, Bonds, Dollar, Inflation’ in the subscribers’ area of the Street Smart Report website from Thursday, and on the U.S. Market from Wednesday. The next issue of the newsletter will be out tomorrow.

Yesterday in the U.S. Market.

The market closed positive again, but with only a fractional move. The Dow traded in a total range from its intraday low to its intraday high of just 76 points and closed in the middle of that range, up 32 points, or 0.3%, almost but not quite another new rally high. Volume remained light, with just over 0.7 billion shares traded on the NYSE.

The Dow closed up 32 points, or 0.3%. The S&P 500 closed up 0.2%. The NYSE Composite closed up 0.4%. The Nasdaq closed up 0.1%. The Nasdaq 100 closed down 0.2%. The Russell 2000 closed up 0.5%. The DJ Transportation Avg. closed up 0.6%. The DJ Utilities Avg closed up 0.3%.

Gold closed down $6 an ounce at $1,608 an ounce, hanging on above $1,600.

Oil closed down $0.17 a barrel at $101.39 a barrel.

The U.S. dollar etf UUP closed down 0.4%.

The U.S. Treasury bond etf TLT closed down 0.2%.

Yesterday in European Markets.

Markets in Europe closed mixed yesterday. The London FTSE closed down 0.7%. The German DAX closed down 0.7%. France closed up 0.3%.

Asian Markets Surged Up Last Night.

The DJ Asia-Pacific Index closed up 1.2%.

Among individual markets last night:

Australia closed up 1.1%. China closed up 2.7%. Hong Kong closed up 0.7%. India closed up 2.2%. Indonesia closed up 1.3%. Japan closed up 0.4%. Malaysia closed up 0.61. South Korea closed up 1.5%. Singapore closed up 1.1%. Taiwan closed up 1.2%. Thailand closed up 0.8%.

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Markets This Morning.

European markets are up strongly this morning. The London FTSE is up 1.5%. Germany’s DAX is up 1.9%. France’s CAC is up 2.6%

Oil is up $1.71 a barrel at $103.02.

Gold is surging up $27 an ounce at $1,635 an ounce.

This morning in the U.S. Market:

This is a very light week for potential market-moving economic reports, but they include the Small Business Confidence Index, the Fed’s Beige Book, Retail Sales, etc. To see the full list click here, and look at the left side of the page it takes you to.

There were no important economic reports yesterday.

Today’s only report is that the Small Business Confidence Index was up again in December, rising 1.8 points to 93.8, its 4th straight month of improvement.

The 4th quarter earnings reporting period has arrived, with Alcoa, the first Dow stock to report, reporting after the close yesterday that its 4th quarter earnings of 24 cents a share last year reversed to a loss of 18 cents a share in the 4th quarter this year. But it wasn’t a surprise and the stock is up 2.5% in pre-open trading on the company’s upbeat forecast for this year.

The surging markets in Asia last night, and Europe this morning, are leading the U.S. market higher this morning.

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being up 120 points or so in the early going.

To read my weekend newspaper column ‘Can The U.S. Economic Recovery Overcome Europe’s Drag? Click here.

Subscribers to Street Smart Report: In addition to the charts and updates in the ‘premium content’ area of this blog this morning, there is an in-depth signals and recommendations report on ‘Gold, Bonds, Dollar, Inflation’ in the subscribers’ area of the Street Smart Report website from Thursday, and on the U.S. Market from Wednesday. The next issue of the newsletter will be out tomorrow.

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I’ll be back Thursday morning with the regular Thursday morning post, around 9":25 a.m. (This blog appears every Tuesday, Thursday, and Saturday morning!).

**** End of Today’s post*****

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