Daily Market Commentary

Best Q1 Since 1999!

Thursday, March 31, 2011
Stock Market Commentary:

Stocks were quiet on Thursday as the major averages enjoyed their best Q1 since 1999 and traders awaited Friday’s much anticpated jobs report.  It was encouraging to see a slew of leading stocks and the benchmark S&P 500, Dow Jones Industrial Average, Nasdaq composite, and small cap Russell 2000 index all close above their respective 50 DMA lines last week. The 28-week rally, which began on the September 1, 2010 follow-through day (FTD), ended on Thursday March 10, 2011 when all the major U.S. averages plunged below their respective 50 DMA lines in heavy trade. However, the correction was short lived when a new rally was confirmed on Thursday March 24, 2011′s healthy action. The healthy action suggests the bulls are back in control. Interestingly, it took other sources 4 days before recognizing that important fact. We have received a ton of positive feedback about our calls in recent weeks and months, and are happy to be able to help!

Jobless Claims Fall & Market Averages Q1 Results:

Before Thursday’s open, the Labor Department said initial jobless claims fell by -6,000 to a seasonally adjusted 388,000 last week. This was better than the Street’s estimate for a decline of -2,000 but the prior week’s numbers were revised up to 394,000 from an originally reported 382,000. The up tick in jobs bodes poorly for Friday’s monthly jobs report. Economists believe U.S. employers added 195,000 jobs in March. The Labor Department is slated to release March’s non farm payrolls report before Friday’s open. For the quarter, the small cap Russell 2000 index topped its peers, rallying +7%. Elsewhere, the Nasdaq composite rose +4.5%. The benchmark S&P 500 and the Dow Jones Industrial Average both rose +5.5% and +6.6%, respectively.

Market Action-Confirmed Uptrend

From our point of view, the market is back in a confirmed uptrend after a modest (and healthy) -6% correction from its post-recovery highs. The fact that the Dow Jones Industrial Average, small-cap Russell 2000 index, and Copper all closed above their respective 50 DMA lines on Wednesday March, 23 was a very healthy sign and suggests higher prices will follow.  The very next day, the benchmark S&P 500 regained that important level and broke above its downward trendline (shown above). Couple that with the fact that other markets like Oil, Silver, and Gold are all at fresh post recovery highs suggests it is only a matter of time until equities follow. The final bullish sign for us was that a slew of high ranked stocks triggered fresh technical buy signals this week which suggests higher, not lower prices lie ahead. If you are looking for specific help navigating this market, please contact us for more information.

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