Last week ended with the Dow industrials hitting a new intraday
high of the year and the highest point since mid-2008. Friday's
rise was in reaction to a lower unemployment rate and
better-than-expected non-farm payrolls. And the Institute for
Supply Management (ISM) data showed manufacturing was slowly
Daily Stock Market News
+57 points at 12,377 (up 1.3% for the week)
+7 points at 1,332 (up 1.4% for the week)
+9 points at 2,790 (up 1.7% for the week)
Volume and Breadth
910 million shares traded; advancers ahead 2.2-to-1
582 million shares traded; advancers ahead 1.3-to-1
Futures and Related ETFs
May Crude Oil:
+$1.22 at $107.94 per barrel;
Energy Select Sector SPDR
) +24 cents at $79.99
-$10.80 at $1,428.10 per ounce;
PHLX Gold/Silver Sector Index
) -$1.81 at $214.93.
What the Markets Are Saying
With just 910 million shares trading on the first day of the
second quarter, the bulls managed to push the Dow to a new intraday
high and missed a closing high by just 14 points. The S&P 500
closed on its March high at 1,332, but the Nasdaq is still lagging
and rose just 0.31%, missing the March high by over 50 points.
Friday's trading pattern was like four of the five days of the
week, with stocks opening higher only to gradually give back much
of the gains by the close. Tuesday broke the pattern by opening
sharply lower on a drop in consumer confidence and downgrades of
European bonds, and then rallied for the remainder of the day,
The best news is that Friday's new Dow high confirmed that its
deep sell-off of mid March has been neutralized and that the senior
index is again in an uptrend. Even though the other indices have
lagged, all have successfully exceeded their respective 50-day
moving averages, and the S&P 500, as noted, is within range of
its immediate resistance, the March high of 1,332.46 (but still
about 12 points from the February high).
This weekend, Mark Arbeter, chief technician at Standard &
Poor's, made note of the unusual "V" bottom that we discussed last
week. Mark noted that there is normally some "backing and filling"
following a sharp sell-off like the mid-March massacre. But he
thinks that the S&P 500 or Nasdaq will continue on to new highs
before we see a pullback.
Not much was made of the emerging markets story last week. After
breaking down earlier, the
iPath MSCI India Total Return Index ETN
iShares FTSE/Xinhua China 25 Index Fund
) completed solid bottoms and appear to be back on track.
Even though the U.S. markets may successfully test the February
highs, the lack of conviction as measured by volume is troublesome.
And from a technical perspective, the rare "V" recovery is not a
long-term positive sign either. My guess is that even if new highs
are made by the S&P 500, the Nasdaq may not follow through
since it has not taken the lead on the recent rebound.
The most sensible approach is to be a very cautious bull. Hold
cash, gold and inflation-protected ETFs. Short-term trading is OK,
but only with trailing stop-loss orders. This is not the time to
chase speculative stocks that are close to old highs.
For one ETF to trade now, see the
Trade of the Day
Today's Trading Landscape
To see a list of the companies reporting earnings today,
For a list of this week's economic reports due out,
If you have questions or comments for Sam Collins, please
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