Daily Stock Pick of the Day

Stocks closed today a little higher, but trading was mild today as investors wait out a number of economic reports, annoucements and the results of the mid-term elections in the coming week.  Stocks were lower after the opening, in part due to a strengthening dollar, weak earnings and disappointing housing news, but a positive consumer confidence report helped push stocks into positive territory.

The Dow rose 5 points to close at 11,169. The S&P 500 was neutral at 1,185 and the tech-heavy Nasdaq ended up 6 points to finish at 2,497. The CBOE Volatility Index was above 20.

In economic news, consumer confidence rose very little in October and remains at historically low levels.  Concerns about the job market continue to permeate the market  The Conference Board reported confidence rose to 50.2 in October from a revised 48.6 in September, according to the group. Economists were expecting a reading of 49.2.


The prices of U.S. single-family homes fell in August, again remaining at levels that are historic lows after the popular home-buyer tax credits have expired -- according to the Standard & Poor's/Case-Shiller home price report.  Their report showed that metro areas declined .3% in August over July (seasonally adjusted).  This dip follows a .6% gain in July.

So now what?  For me, I'm mixed.  The trends in the finacial markets due to the foreclosure crisis makes me critical of what lies ahead.  Consumer confidence isn't showing much strength.  Housing is still way down.  So, in the short term, I think this rally is losing some of it's momentum.  However, in light of the event last week, wherein the S&P 500's 50-day moving average crossed above the 200-day, I'm rather bullish on a more intermediate-term basis (think 60 days or so).  This rally certainly has legs.  I'm cautious about what lies ahead for November, but, even a mild pullback would probably be a healthy start up to a strong year-end rally.

Today's stock pick of the day is one I want to revisit.  In August, I wrote about Coinstar (CSTR).  At the time, it was trading between $46-47 range and had been pulling back a bit.  It did not find support at the 50-day moving average and actually, it fell quite a bit below it, even briefly piercing it's 200-day moving average intraday in September.  Since October 8, however, it has rebounded nicely back above it's 50-day moving average again.  Here's what I'm watching for:  a close at or above $48 on volume of at least 1mil shares.  Then, I think it's off to the $50-$52 range in a swift manner.

Remember stay cautious -- Jobless claims and GDP are coming up on Thursday and Friday.  Happy Trading!

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