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Christopher Grosvenor, CMT
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Chris earned the Chartered Market Technician designation. He is earning the Chartered Financial Analyst designation and graduated with honors in Economics. Also, he has managed money as a professional trader and independently, and continues to do so. Chris utilizes Technical, Financial Analysis... More
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Grosvenor Research & Analysis
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Professional Fundamental & Technical Analysis
  • Equities To Find Bids This Week 0 comments
    Mar 20, 2012 3:21 PM | about stocks: SPY, DIA, IYT, QQQ
    United States equities may decline Monday-Wednesday as investors await economic data later in the week. Equities could find bids Wednesday - Friday on economic news of continued stabilization in the housing market, purchasing manager data out of China and European Union, and signs from unemployment claims of continued improvement in labor market conditions.

    Building Permits
    Building permits issued have increased. Building permits for privately-owned housing units increased 19 percent between January 2011 & 2012. Building permits in the south increased 30 percent over last year and 13.5 percent in the West.

    Tuesday investors will be watching for continued strength in building permits issued in the southern and western regions of the United States.

    Existing-Home Sales
    Existing-home sales rose in January, registering gains in three of the past four months, while inventories continued to improve. Distressed homes - foreclosures and short sales which sell at deep discounts - accounted for roughly one third of January sales; they were 37 percent in January 2011. The median existing single-family home price was $154,400 in January, down 2.6 percent from January 2011.

    Existing-home sales at an annual pace of 4M or more in February is considered bullish; existing single-family home prices are expected to continue to decline moderately.

    China Manufacturing Purchasing Managers' Index
    The pace of decline in manufacturing in China has moderated in recent months. Growth is slowing as domestic demand isn't expected to rebound straightaway. Exports should pick up later in the year should Europe rebound from recession as the ECB expects. China's Manufacturing PMI has increased in recent months and could come in above a reading of 50 signaling growth in manufacturing. Import prices are a key factor to watch for signs of increasing inflation as the People's Bank of China is expected to continue to ease and an increase in import prices could dampen expectations of further rate cutes.

    Signs of a recovery in European demand could appear in European Union PMI figures to be released on Thursday. Look for Germany and France to remain above a reading of 50 and combined European Union PMI data to potential reach the 50 level.

    Unemployment Claims
    Thursday Unemployment claims will be released; watch for the claims number to remain below 400k. A strong claims number would signal a strengthening labor market and economy. As labor market conditions improve, increases in consumption, savings and investment should continue to support economy growth and asset prices.

    Equities With Profit Potential
    Technology continues to be an outperformer with the PowerShares QQQ (NASDAQ:QQQ) advancing. The iShares Dow Industrial Transportation Average (NYSEARCA:IYT) has lagged during the rally from the October lows and is starting to gain ground on the Dow Industrial Average (NYSEARCA:DIA). The SDPR S&P 500 (NYSEARCA:SPY) is also likely to gain this week on continued strong economic data. A decline in share price would be an opportunity to buy these names.

    Disclosure: I am long DIA.

    Stocks: SPY, DIA, IYT, QQQ
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