Weston, Nov 13 (FlowTrades.com) - FlowTrades.com an online subscription service that increases confidence in trading stocks, by providing in-depth technical analysis of stocks with a simple to use system to lock up profits and limit losses, issued its weekly market overview, The Weekly Flow.

Stocks advanced for a second straight week, reaching 13 month highs, as investors cheered a pledge from the G20 to maintain stimulus efforts and economic data that seem to indicate that the global economic recovery is gaining momentum. Gold climb to all time highs, while crude oil fell to a 1 month low as consumer confidence slipped.

For the week, the Dow gained 2.5%. The S&P 500 climbed 2.3%, while the NASDAQ jumped 2.6%.

At the start of the week, Bears took a beating as stocks surged extending a global rally, sending the Dow to a 13 month high, as the Dollar weakened after the Group of 20 agreed to maintain economic stimulus efforts. Commodities climbed with gold reaching a record above $1,100 an ounce.

 
The gains were broad based with all but 1 of the 30 Dow components finishing higher. The G20 rally was led by financials and commodity related shares.

Also on Monday, the Federal Reserve said that 9 of 10 bank holding companies deemed short of capital in May have raised their reserves enough to withstand the risk of higher unemployment and slower economic growth. The announcement pushed the financials higher, as the sector gained the most of the 10 industry groups in the S&P 500, adding 3.6%.
 
Crude Oil jumped as the Dollar weakened and a late season storm entered the Gulf of Mexico threatening to disrupt production. The contract for December delivery rose 2.58% to settle at $79.43 a barrel.

On Tuesday, the market traded with choppiness and in a tight range as investors took a breather. The Dow managed to eke a small gain. Health-care, materials and utilities were the best-performing sectors, with the health-care sector moving 0.5%, the most of the 10 S&P 500 sectors.

The Dollar rebounded from a 15 month low versus the euro on reduced risk demand; as it seemed that everybody had a short position in the greenback, so there are fewer participants selling the Dollar, meaning that the currency was due a snap back.

Crude oil fell after trading above $80 a barrel on the strength of the Dollar and the weakening late season storm “Ida”. The contract for December delivery fell 38 cents to settle at $79.05 a barrel.

Mid week, on Veteran’s day, the Dow posted its sixth straight winning session as it reached a 13 month high. The market received an early boost from strong Chinese economic data on industrial production and retail sales. The Dollar hit a new 15-month low early on as the demand for risk increased on the back of the Chinese data. The greenback rebounded towards the close, but stocks held the gains.

Financials, materials and technology were the biggest gainers, with financial shares adding 1.4%, the steepest gain among the 10 S&P 500 sectors. The Homebuilders also rallied and had their biggest gain since May, as Toll Brothers (NYSE:TOL), the largest luxury homebuilder, reported that orders surged 42% in their fiscal 4th Quarter beating earnings estimate. The homebuilder also commented that their cancellation rate has significantly moderated, and it’s now at pre sub-prime crisis levels.

Also boosting equity investor optimism were speeches from several Fed officials that reiterated that economic growth and inflation may persist below ideal level into 2011, making the current interest rate stance appropriate to the economic landscape.

Gold rose to a fresh new all time high of $1119.10 an ounce on demand for a hedge against further weakness in the Dollar and as a response to the governments’ stimulus across the global economy.

Crude oil initially rose above $80 a barrel as Chinese crude imports climbed in October to their second-highest level ever, as increased production spurred fuel demand, however as the Dollar bounced back, oil gave back much of the gain.

Stocks retreated as a conservative holiday shopping outlook from Wal-Mart and a slump in the energy sector following bigger- than-estimated growth in crude oil stockpiles overshadowed a drop in weekly unemployment claims.

Wal-Mart (NYSE:WMT) rose 0.5%, as the world’s largest retailer posted third-quarter profit of 84 cents a share, beating the 81-cent average analyst estimate. Investor response was tepid as the sales forecast for the fourth quarter was weaker than expected.

The energy sector slumped 2% having the steepest decline of the 10 key S&P sectors. The sell-off in energy came after the Energy Department released its report on crude stockpiles. The report showed that crude oil inventory rose more than expected as refinery operations declined to their lowest level since September 2008.

The unexpected increase in crude oil inventories raise concerns that the demand for the fuel is not strengthening, despite indications that the economy is showing indications of stabilization. The contract for December delivery fell 3% to $76.94 a barrel.

The economic news were positive, as the weekly jobless claims report was better than expected with claims falling for the 2nd straight week to their lowest level since January 3. Even though the drop in claims is reassuring, the level still signals job losses in the economy.

At the end of the week, stocks bounced back as better than expected earnings reports overshadowed an unexpected drop in consumer confidence.

Stocks were cautiously higher at the open, as investors weighed better than expected earnings reports from Walt Disney (NYSE:DIS) and Abercrombie & Fitch (NYSE:ANF). The market briefly erased gains in the morning after the University of Michigan released its preliminary index of consumer sentiment. The report showed that the index decreased to 66 from 70.6 in October, surprising economists that were expecting a rise.

Consumer discretionary shares gained 1.6%, posting the steepest advance among 10 key industries in the S&P 500. Disney was the biggest gainer on the Dow, up 4.8%, after the entertainment giant beat expectations for both earnings and revenue after the bell Thursday.

The U.S. Department of Commerce reported that the September trade deficit increased the most in a decade, reflecting rising demand for imported oil and automobiles as the economy rebounded from the worst recession in decades. The gap grew a larger-than- anticipated 18%to $36.5 billion, the highest level since January, from a revised $30.8 billion in August.

Despite a weak Dollar, crude oil fell to a 1 month low, on a weaker than expected U.S. consumer confidence report, which signaled that fuel demand will be slow to rebound. The contract for December delivery fell 59 cents to $76.35 a barrel.

Treasuries fell as investors digested the $81 billion that were auctioned this week. The yield on the benchmark 10-year note rose to 3.43%.

The S&P 500 has not been able to break resistance above 1,100 as at end of the week it continued to consolidate at the top of the range. Price action is not encouraging, as more stocks are starting to rollover, especially the financials.  Also, unless something dramatic happens on the Dollar, crude oil is not looking good at all; it could bring down the overall market considerably.

On the positive side, we did have stocks moving to new 52 week highs, all of them within the retail and consumer discretionary space, as the bet of a better holiday season continues.

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