Weak Open But Strong Close!

SPX- Weak Open But Strong Close
SPX- Weak Open But Strong Close

Thursday, March 29, 2012
Stock Market Commentary:

Stocks and other risk assets fell on Thursday after the latest round of economic data missed estimates and fears emerged regarding the European  debt crisis. 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 and that level should now become support. The next level of support would be the 50 DMA line, then a deeper 5-9% pullback. It is important to note that the bulls remain in control of this market as long as the benchmark S&P 500 stays above its 50 DMA line.

Fear of an Economic Slowdown Hurts Stocks:

Stocks ended mixed on Thursday, recovering from a weak open, after fear spread regarding the global economic recovery, fresh EU debt woes, and weaker than expected economic data from the U.S.. European stock markets were smacked after workers in Spain went on strike to protect their austerity measures one day before their 2012 budget is slated to be released. Spain’s stock market, IBEX, fell to a four-month low while Italy’s also got hammered on debt woes. Meanwhile, two important economic reports missed estimates in the U.S. The Commerce Department said its final estimate for Q4 2011 GDP was unchanged at +3.0%. This was the strongest gain since Q2 of 2008 but missed the Street’s +3.2% estimate. Meanwhile, the Labor Department said weekly jobless claims fell by 5,000 to a seasonally adjusted +359,000 last week. Jobless claims fell to a four year low but missed the Street’s estimate of 350,000.

Market Outlook- Confirmed Rally

Risk assets (mainly stocks and a slew of commodities) are pulling back after a very healthy rally. This shallow pullback is considered healthy and shows how strong the bulls are at this point. However, if sellers show up and support is breached then the bears will have regained control of this market. As always, keep your losses small and never argue with the tape. If you are looking for specific help navigating this market, feel free to contact us for more information. That’s what we are here for!
Coming Up This Week:
WEDNESDAY: Weekly mortgage apps, durable goods orders, oil inventories, 5-yr note auction, Fed’s Bullard speaks, FDA discusses obesity drugs
THURSDAY: GDP, jobless claims, corporate profits, Fed’s Plosser speaks, 7-yr note auction, farm prices, Fed’s Lacker speaks; Earnings from Best Buy, Research In Motion
FRIDAY: Personal income & outlays, Chicago PMI, consumer sentiment, Stringer’s last day as Sony CEO
Source: CNBC.com

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