Stocks Edge Higher On Stronger Than Expected Housing Market
Tuesday, March 23, 2010
Market Commentary:
The major averages ended higher after stronger-than-expected data was released from the ailing housing market. Volume totals were higher compared to Monday’s totals on both major exchanges. Advancers led decliners by over a 2-to-1 ratio on the NYSE and by a 2-to-1 ratio on the Nasdaq exchange. There were 77 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 45 issues that appeared on the prior session. New 52-week highs again overwhelmingly trumped new lows on both exchanges.
Stronger Than Expected Housing Data Lifts Stocks:
The benchmark S&P 500 hit a new 18-month high after the National Association of Realtors said existing US home sales slowed to 0.6% last month which topped estimates. February’s reading was also higher than January’s -7.2% decline. Elsewhere, KB Home (KBH) gapped down on above average volume after the company released its latest earnings report. Fundamentally, housing stocks continue to woefully underperform but their technicals are quietly improving.
Market Action- Confirmed Rally:
The fact that there has only been one distribution day since the follow-though-day (FTD) bodes well for this nascent rally. It is also a welcome sign to see the market continue to improve as investors digest the latest round of stronger than expected economic and earnings data. Remember that now that a new rally has been confirmed, the window is open to proactively be buying high quality breakouts meeting the investment system guidelines. Trade accordingly.
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