TradeMaster Daily Stock Alerts Blog

Small-cap stocks are set to start out the week on a positive note, looking to build on last week’s advance, which marked the first weekly gain since mid-September. The cost of inter-bank lending fell sharply overnight, suggesting that frozen credit lines are thawing and mistrust among banks is starting to evaporate, which provided a lift to stocks. The Russell 2000 (NYSE:IWM) was up about 1.9% in pre-market trading, which suggests an opening near 536.00.

The economic calendar is very light this week and the leading indicators report slated for release at 10:00 a.m. ET is basically a compilation of dated data and probably won’t have a lasting impact on the market. However, Federal Reserve Chairman Ben Bernanke is slated to testify on the economy before the House Budget Committee at 10:00 a.m. ET, which could spark some fireworks into the mix this morning.

Looking at market action around the world overnight, Singapore stocks were up 3.2%, Indonesia was up 2% and shares in Thailand were up 0.9%. Malaysia stocks were up 0.5%, but the Philippine index was off 1.7% and Vietnam was down 3.1%. Japan stocks were up 3.5%, Hong Kong shares were up 5.3%, while the China market rallied 2.5%, shaking off a GDP report of 9% that missed the 9.7% forecast. Growth in China slipped to the lowest rate in five years and year-over-year growth was on target to slip below double-digit levels for the first time since 2002.

Higher crude oil prices overnight appear to be providing a lift to energy stocks in pre-market trading with Exxon Mobil Corp. (NYSE:XOM) and Halliburton Co. (NYSE:HAL) both up some 3%.

The chart picture for the Russell 2000 is at an interesting crossroads where the market needs to either provide support this week for the bottoming argument or sink into another leg down. There were positive signs of note last week on daily studies (a twin wick double bottom) but the overall bear market is still the dynamic chart impression. There is minor chart resistance for daily purposes early week at 538 and 550, but the key near-term test is in the 567-570 zone. On the downside, support comes in today at 519, then critical “figure” support is at 500.

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