Investors digested a slew of data on Thursday  led by the explosive post Stress-test results from the country’s largest banks. From our point of view, the major averages confirmed their latest rally attempt on Tuesday 1.3.12 which was Day 9 of their current rally attempt. Since then, stocks have been enjoying a very strong uptrend. The benchmark S&P 500 paused near its 2011 high (~1370) before moving higher. It would be perfectly normal and healthy to see a 5-9% pullback at any point to give the bulls a chance to consolidate the recent gain. That would bring the S&P 500 down to 1310-1250. Until then, the bulls remain in control of this market as long as the benchmark S&P 500 stays above its 50 DMA line.

On Average, Economic Data Helps Stocks:

Investors digested a slew of economic data on Thursday. The Labor Department said weekly jobless claims fell to a fresh 4-year low which bodes well for the jobs market and the broader economy. Jobless claims fell by 14,000 to 351,000 last week. Meanwhile, the PPI rose +0.4%, largely due to a jump in energy prices. New York manufacturing rose and topped estimates but showed inflationary pressures are rising. Meanwhile, the Philadelphia Federal Reserve Bank’s business activity index rose for a fifth consecutive month to 12.5 from 10.2 in February. The report topped the Street’s estimate of 12.0.

Market Outlook- Confirmed Rally