Thursday, March 10, 2011
Stock Market Commentary:

On Thursday, stocks tanked as the US dollar jumped and concern spread about inflation in China. The current crisis in the Middle East remains in flux which is putting upward pressure on oil and gold and downward pressure on equities. The benchmark S&P 500 is up nearly 100% from its March 2009 low, and still about -16% off its all time high from October 2007. On average, market internals remain healthy as the major averages bounced after finding support near their respective 50 DMA lines in late February and early March.

Jobless Claims & U.S. Trade Deficit:

Before Thursday’s open, the Labor Department said jobless claims rose by 26,000 to 397,000 last week. This topped the Street’s estimate of 376,000, and bodes poorly for the ailing jobs markets. Elsewhere, the Commerce Department said the U.S. trade deficit widened more than expected in January. Imports surged largely due to extremely high crude oil prices and overshadowed record exports. Imports rose +5.2%, which is the most since March 1993, while exports grew +2.7%.

Market Action- Market In A Correction; Week 28 Ends

The tech-heavy Nasdaq composite, Dow Jones Industrial Average, S&P 500, and the Philly semiconductor index ($SOX), and small cap Russell 2000 index, all violated their respective 50 DMA lines on Thursday which officially ended the current 28-week rally that began on the September 1, 2010 follow-through day (FTD).  This underscores the importance of raising cash and playing strong defense until a new FTD emerges. If you are looking for specific help navigating this market, please contact us for more information.

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