Stocks opened higher on Wednesday, 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.

Financials Lead, Economic Data Helps:

Before Wednesday’s open, the government said import prices fell short of the Street’s estimate, rising +0.4% in February thanks to a large drop in food prices. Meanwhile, the U.S. current account deficit, jumped to a three-year high of $124.1 billion. A separate report showed that the Mortgage Bankers Association said demand for home loans slid by -2.4% but actually rose 4.4% excluding a drop in refinancing requests last week.

Market Outlook- Confirmed Rally