Monday-Wednesday: European Fears Resurface
Thursday & Friday’s Action: Cyprus Fear Eases
Before Thursday’s open, investors digested a slew of data. Banks in Cyprus finally reopened after their EU partners agreed to a last minute bailout. In the U.S., the third estimate for Q4 2012 GDP showed the economy grew by +0.4% which topped the Street’s expectation for a gain of +0.3%. It also topped the initial reading of -0.1% and the revised reading of +0.1%. Weekly jobless claims totaled 357k which topped the Street’s estimate for 338k. Markets were closed on Friday in observance of Good Friday.
Market Outlook: Uptrend
The market is strong as the bulls continue to quell the bearish pressure. The major averages are building a new and healthy 4 week base as they paused to digest their recent and robust rally. Until the market breaks and closes below its 50 DMA line- the bulls deserve the benefit of the doubt. As always, it is extremely important to be flexible in your approach and change when the facts change (Thank you Mr. Keynes). For those of you that are new to our work, on October 9, we said “the rally was under pressure” and then said the “rally was over” on Oct 19. Immediately after that note was published, stocks fell sharply and a lot of technical damage occurred. Then we published a note on Friday, November 16, 2012 (the exact low for this move) titled, “Time For A Bounce” and the rest is history. Most recently, on Wednesday, February 20, 2013 we sent out a note saying, “Time For A Pullback” and a week later on Feb 27, 2013 we sent a note saying “Bulls Quell Bearish Pressure.” Stay tuned as we will continue to keep you in sync with the market and ahead of the crowd. As always, keep your losses small and never argue with the tape.