Daily Market Commentary

Stocks Rally On Healthy Retail Sales Data

Thursday, April 8, 2010
Market Commentary:

The major averages rallied on Thursday after a slew of US retailers reported stronger than expected same store sales. Volume totals on the NYSE and on the Nasdaq exchange were reported lower compared to Wednesday’s totals. Breadth was positive as advancers led decliners by about a 10-to-9 ratio on the NYSE, and by a 14-to-13 ratio on the Nasdaq exchange. New 52-week highs trumped new lows on both exchanges yet again. There were 36 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, lower from the 52 issues that appeared on the prior session.  A healthy crop of new leaders making new highs bodes well for any market rally, so the recent expansion in leadership has been a welcome post-holiday improvement.  However, the rising number of distribution days has raised some concerns.

Investor’s Digest A Slew Of Economic Data: Greece Woes, Jobless Claims & Healthy Retail Sales Data:

Stocks were under pressure as concern spread that Greece’s debt crisis may intensify and spread to other European nations which may hinder the global economic recovery. However, the fears subsided after European Central Bank President Jean-Claude Trichet said he doesn’t expect Greece to default. In the US, same store sales from many of the nation’s largest retailers topped estimates which bodes well for the economy. In addition, a slew of retailers hit fresh 52-week highs which bodes well for the entire retail sector. Elsewhere, the Labor Department said initial jobless claims unexpectedly rose +18,000 to +460,000 last week.

Market Action- Confirmed Rally:

The benchmark S&P 500 Index currently has 5 distribution days while the Nasdaq Composite and Dow Jones Industrial Average have 4 since the March 1, 2010 follow-though-day (FTD). These distribution days have not been damaging, however the simple fact that we currently have 5 distribution days for the S&P 500 suggests a more cautious approach may be prudent. Trade accordingly.
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