Daily Market Summary & Analysis, SEPT 01, 2010
September 1, 2010
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Thank to China and Australia, stocks were on fired across Asia today. HongKong up +0.43%, Taiwan up +0.68%, Singapore up +1.10%, Japan up +1.17%, South Korea up +1.15%, Australia up +2.08%, India up +1.31%, but China down -0.66%. AUG China manufacturing data of 51.7 showed strength in economic recovery. Australian was the main spotlight with exports up 5.6% in Q2-2010 and GDP grew 1.2%, due to commodities demand from China.
Today in Wall Street… the bull was fully in charge and equities enjoyed a huge rally, due to encouraging macroeconomic data from Asia and the US. Buying and short-covering was accelerated when AUG ISM Manufacturing Index was reported. August ISM showed a surprisingly strong manufacturing activity, 56.3 better than expectation of 52.5. All major indexes are positive for the week after a historic decline of -4.8% in August. The DOW, the S&P, and Nasdaq had their best day since July 7, 2010 and the best day for the September month since 1998. The DOW up +2.54% to 10,269.47, the S&P500 up +2.95% to 1,080.29, and Nasdaq up +2.97% to 2,176.84. Kent Croft, CIO and portfolio manager of Croft Value Fund, believes it’s a great time to add high-quality dividend stocks as the market is trading at low valuation. Craig Hogges, co-portfolio manager at The Hodges Fund & Hodges Small Cap Fund, also believes “bad news are priced in the market”. He likes undervalued stocks with time-frame of 18 months. “Market is dominated by quantum and day traders,” he further explained reasons for the recent market volatility.
Technically, the S&P 500 60 min &120 min chart both now indicated a triple bottom. Resistance for the index now are the 50d-MA at 1081, the 200d-MA at 1115.70, and the June high at 1130 range. On the daily chart below, one can clearly see the 1130 range was retested and failed at several attempts in early August. If the bulls can take these resistance out with force, this market can induce more short covering and more institutional buying.
Best regards to all, and good luck in your trading.
Disclosure: No stocks mentioned in the report.