Daily Market Commentary

Latest Rally Confirmed! Stocks Rally On Mixed Economic Data

Thursday, March 24, 2011
Stock Market Commentary:

On Thursday, U.S. stocks opened higher after the latest read on durable goods and jobless claims were released. 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, Thursday March 24, 2011’s healthy action confirmed the current rally attempt which suggests the bulls are back in control.

Durable Goods & Jobless Claims:

Before Thursday’s open, two important economic reports were released: durable goods and jobless claims. Durable goods, which are items meant to last at least three years, unexpectedly fell -0.9% last month. Excluding transportation, new durable goods orders slid -0.6%, after a -3.0% decline in January. Meanwhile, the Labor Department said weekly jobless claims slid -5,000 last week to -382,000 which bodes well for the recovering jobs market. The latest read on Q4 GDP is slated to be released before Friday’s open. It was already revised down to +2.8% from the initial +3.2% estimate.

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 it’s post-recovery highs. The fact that the Dow Jones Industrial Average, S&P 500, 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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