Snap Up Any Bargains That Come Your Way

Buy on any weakness, as the overall trend is up

   

Snap Up Any Bargains That Come Your Way

A strong ADP Employment Report started things on the right foot yesterday, when the weekly initial jobless claims came in at 418,000 versus a consensus estimate of 425,000. Financial stocks led the gains, with materials, technology and energy not far behind.

07 08 11 djt Snap Up Any Bargains That Come Your Way

07 08 11 dji Snap Up Any Bargains That Come Your Way

chart key Snap Up Any Bargains That Come Your Way

One of the leading indicators, the Dow Jones Transportation Average, hit a new all-time new yesterday, but its cousin, the Dow Jones Industrial Average, still trails, unable to pop through the April highs. The all-time high for the Dow industrials is 14,280, made in October 2007. However, at this time, with broad-based strength throughout the market, there is little likelihood of a non-confirmation from the industrials versus the transports discussed yesterday.

07 08 11 spx Snap Up Any Bargains That Come Your Way

chart key Snap Up Any Bargains That Come Your Way

The S&P 500 closed above its June peak of 1,345 as volume increased slightly from early this week, and advancers led decliners by 3.5 to 1 on the NYSE. The next target for the S&P 500  is the May high at 1,371. Initial support is now at 1,344-1,345.

07 08 11 uup Snap Up Any Bargains That Come Your Way

chart key Snap Up Any Bargains That Come Your Way

We keep watching the U.S. dollar, via the PowerShares DB US Dollar Index Bullish Fund (NYSE: UUP), saying, “if the index is able to close above the bearish resistance line, now at $21.50, the dollar could be headed for a dramatic trend reversal up with the implication that stocks and commodities could move down.”

UUP is now testing its major bearish resistance line and is reaching the end of the apex of a descending triangle. We should soon know the next direction of the dollar. Note that Moving Average Convergence/Divergence (MACD) is very close to issuing a buy signal, which could trigger a short-term round of profit-taking in stocks.

But buy on any weakness. Both the intermediate-term and long-term trends are strong, so bargains should be snapped up.

Today’s Trading Landscape

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.

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Article printed from InvestorPlace Media, http://investorplace.com/2011/07/snap-up-any-bargains-that-come-your-way/.

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