Daily Stock Pick of the Day - Mon., Oct 11, 2010

In a surprising move, stocks climbed above the 11,000 mark on Friday as traders felt the weak jobs report would be enough to get the Federal Reserve to step up it's borrowing efforts when it meets in early November.  The Dow was up 60 points,  .5% and closed above the psychologically significant 11,000-level for the first time since May flash crash (11,006). To date, the highest the Dow closed was on April 26, at 11,205. The S&P 500 and the Nasdaq were also higher. The S&P 500 added 7 points and closed at 1,165.  The Nasdaq added gained 18 points and closed at 2,401.  The Volatility Index fell lower, at 20.  Gold rose today to $1,345 while the dollar fell against the yen and the euro.

In economic news, the non-farm payrolls report came on Friday morning.  The nation's private employers added 64,000 workers last month.  Economists were expecting and addition of 75,000.  Bottom line:  95,000 jobs were cut and the unemployment rate held steady at 9.6% in September. Economists polled by Thomson Reuters were expecting it to rise to 9.7%.

The belief among the traders on the floor of the exchanges is that a weak jobs report increases the possibility the Fed is going to pump more money into the financial system to help spark some economic growth (a.k.a "quantitative easing").

The stock I'm looking at today is Logitech (LOGI).  This is purely a technical play and the chart looks good for continued price lifting.  The 50-day moving average has just slightly surpassed, or crossed over, the 200-day moving average as of Friday's close.  This is most often a bullish sign for stocks.  After some further consolidation here ($17.60), I think this stock can lift into the $20-$22 range. 

As always, stay cautious.  There are still plenty of reasons to not "bet the farm".  All one has to do is look at the recent foreclosure debacle with the banks and you'd know that the housing market still has a long way to go before it can recover.  Also, keep in mind that the upcoming earnings season will also be a factor in how far stocks will climb.  Couple these events with the upcoming election and I think it's possible we'll see the return of some volatility in the markets.  Interesting times we live in?  For sure!

Take some time and have some fun -- Check out Wall Street Survivor below.  It's free, fun and best of all, you can build your fantasy portfolio and compete for cash!  Take a look!

Obligatory Disclaimer: This blog is not authored by a financial advisor or a broker/dealer. The author(s) of this blog are not registered investment advisers or registered broker/dealers. The author(s) of this blog do not provide investment or financial advice or make investment recommendations, nor are in the business of transacting trades, nor do they direct accounts or give trading advice tailored to any particular reader’s situation. Nothing contained in this communication constitutes a solicitation, recommendation, promotion or endorsement or offer by the author(s) of any particular security, transaction or investment.


Trading securities involves high risk and the loss of any funds invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. The suggestions contained in this blog are for informational purposes only and the author is not liable for any losses incurred as a result of actual investment activity on the part of the reader. This blog is presented for information purposes only and past results do not guarantee future performance.