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MARKET COMMENTARY - Monday, October 27, 2014
The Dow posted a weekly gain of +2.6%, the S&P 500 jumped +4.1%, and the NASDAQ rallied +5.3%. Behind Friday's gains the volume totals were reported lighter than the prior session totals. Breadth was positive as advancers led decliners by a 3-2 margin on the NYSE and 5-4 on the Nasdaq exchange. There were 35 high-ranked companies from the CANSLIM.net Leaders List that made new 52-week highs and appeared on the CANSLIM.net BreakOuts Page, down from the prior session total of 42 stocks. New 52-week highs outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange. There were gains for 6 of the 8 high-ranked companies currently on the Featured Stocks Page, a list which gained a few new companies this week while broader market conditions improved. Disciplined investors know that new buying efforts may be made under the fact-based investment system only in stocks meeting all key criteria.
PICTURED: The Nasdaq Composite Index was 31 points higher to 4,483, closing the week above its 50-day moving average (DMA) line, which helped its technical stance.
Stocks closed out the week on a positive note. The Dow gained 127 points to 16,805. The S&P 500 climbed 14 points to 1,964. Overall, the major averages snapped a four-week losing streak.
The market advanced as investors focused on positive corporate earnings. At the close eight of the 10 sectors in the S&P 500 were in positive territory. Health care was up the most. Bristol-Myers Squibb (BMY +2.2%) rose following a positive quarterly earnings announcement. Tech was another notable gainer. Shares of Microsoft (MSFT +2.5%) advanced after besting analyst profit estimates. In consumer discretionary Amazon.com (AMZN -8.3%) fell as it lowered forward guidance but delivered a positive earnings surprise. Energy stocks were also lower as the price of WTI crude continued to fall. Chevron (CVX -0.2%) edged lower. On the economic front a measure of new home sales in September gained +0.2%, beating estimates for a -6.8% decline.
Treasuries were little changed. The benchmark 10-year note climbed 3/32 to yield 2.26%. The 30-year bond advanced 6/32 to yield 3.04%. In commodities WTI crude fell on the NYMEX by -1% to $81.26.
Large gains on Tuesday backed by higher volume totals while leadership (stocks hitting new 52-week highs) expanded met the definition of a "follow-through day" confirming a new uptrend for the market (M criteria). The S&P 500 Index, Nasdaq Composite Index, and the Dow Jones Industrial Average have collectively rebounded above their respective 200-day moving average (DMA) lines, technically putting the market in a "healthier" stance.
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The Semiconductor Index ($SOX +1.06%) and the Biotechnology Index ($BTK +1.26%) rose while the Networking Index ($NWX -0.70%) pulled back. Financial shares helped underpin the major averages' advance as the Broker/Dealer Index ($XBD +0.66%) and the Bank Index ($BKX +0.90%) rose. Meanwhile, the Retail Index ($RLX -1.10%) created a drag on the major averages. Commodity-linked groups also had a negative bias on Friday as the Gold & Silver Index ($XAU -0.42%), Oil Services Index ($OSX -0.59%), and the Integrated Oil Index ($XOI -0.23%) suffered modest losses.
Charts courtesy www.stockcharts.com
PICTURED: The Bank Index ($BKX +0.90%) rebounded from new 2014 lows but still remains below its 50-day and 200-day moving average (DMA) lines.