Buyers Push to Rallys Highs

SUMMARY:
- Sellers try to sell early but have no stomach for it and the buyers push the indices to new rally highs.
- Greece knuckles under, calls in the IMF (meaning you and me).
- FOMC members feel it is time to start selling over $1T of mortgage securities.
- March Durable Goods Orders weighed down by lack of airplane sales.
- March new home buyers take advantage of expiring credit, spiking sales 27%
- HHS report pegs national healthcare at hundreds of billions more than expected with millions losing their insurance, and hospitals closing.
- SEC or SEX? Your tax dollars viewing porn.
- Volume finally shows up, but after two months of gains it is not necessarily the good thing some suggest.
- Leadership continues to find a way as money continues to find its way into the market.

Sellers tried their hand again this week but were beaten back with new rally highs.

There was way too much information in the market on Friday, and not all of it had to do with the market. There were the usual issues with Greece, the economy, the Fed, and earnings; but there was other news that was frankly disturbing. The Medicare actuary said that the newly-passed healthcare bill will cost hundreds of billions of dollars more than anticipated. There will be hospital closures because they won't be able to make the bottom line with their expenses and the cost structures that are laid out. Then there was news from FCC, those guardians of our dollars who go after the Bernie Madoffs and corrupt bankers. In the midst of trying to pass a 1600-page bank regulation bill, we find out they are spending their time and taxpayer dollars watching porno sites and spending eight hours a day doing this. One fellow visited the sites 1800 times in two weeks. That is your money at work. We put our trust in the government to do the right thing and be the watchdogs for us. We concede our liberties to them and trust they will take care of us, and we need to rethink that position because it never works. That is why we set up the kind of country we did with checks and balances (that we are giving away). Of course, I digress.

The market was somewhat in trouble until the morning. It was not in dire straits but was just ready to open lower. It bounced around through the morning. Then the dollar started to fall back, and that gave stocks a boost. They rallied up to the close with all of the indices closing positive and pushing to new rally highs. They were led once again by the best rallying sector of all: The small caps. An incredible uptrend, never got in trouble. It didn't stall out as did many of the large cap stocks. It just kept trucking. SP500 hit a new rally high as well, pushing through the high of just over a week ago. It was an important move for the SP500 because it had undergone a week of some churn, as had the other large cap indices. High volume and an inability to move further at the top of the run is a warning sign. It was good to see it push through, and now we will see if it holds the move into next week and keeps things going. The stock market ended the week on a very positive note and looks to be in good shape once again.

OTHER MARKETS.

Dollar. The dollar started the day strong, but it was not able to hold that gain at least against the basket of currencies on the DXY0. It did finish lower against the Euro after starting stronger on the day (1.3369 Euros versus 1.3291 Thursday). As the dollar reversed, the stock market seemed to pick up momentum toward the end of the day. It was also stronger Friday morning before it reversed. The dollar is still in good shape because it rallied back. It was in trouble over the last three weeks, but it has broken back up and looks solid. It had a boost of last week because of the issues in Greece. On Friday there was a reason that the dollar reversed after starting stronger: Greece finally gave in and asked the IMF to bail them out because the austerity programs were not being well-received by the market. Of course they are not. Every time the Greek government announced a modest (at best) austerity package, the pension holders and workers had strikes and rioted in the street. The market was not too sanguine about what Greece was trying to do, because it knew it would not fly with the workers. After Greece initially said it wanted IMF help and the dollar surged, things calmed down and the dollar faded. It is still in decent shape, but it sold back on the session.

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Bonds. Bonds in the US finished weaker; in other words, they sold and pushed yields higher (US 10 year 3.82% versus 3.77% Thursday.) Bonds surged in the US off this low based upon the weakness building in Greece. It came out this week when the Greek bond market imploded and yields surged and their bond curve inverted. That means the short end including the 2 year note held a higher yield than the long end. In other words, money had no value down the road in Greece because they thought things would get worse. That inversion is a sign of economic recession at the least.

The government came to its senses and thought it better get money now before things get out of hand. That helped ease some of the pressure on the US dollar because everyone said at least the IMF is in there now and will help. We will see. Our bond market tells us the story is not over because bonds rallied off their lows on Friday. We know there are still skeptics in the bonds market, and you can see that when looking at the pattern. Bonds were also hit because at least half of the FOMC members think it is time for the Fed to start selling its $1.25T in mortgage-related assets. It is time to start clearing the books. It may not be the same thing as tightening, but it has that effect as it tends to drive rates higher because it makes what they are holding worth less. Bonds struggled and sold and yields rallied in the US on Friday for those two reasons: the IMF going into Greece, and more indication that the US Fed will embark on a tighter money policy. That has to happen, and it is one of the reasons bonds have been trending lower since December. The rally over the last few weeks was due almost directly to worries of failure in Greece. We will see if that changes now that the IMF is in. It also didn't hurt that Russia had a successful bonds auction for the first time in about ten years. Iceland had its credit rating increased by Moody's. Iceland was one of the first banking systems to collapsed, and the raised credit rating may help. You cannot help but think that maybe Moody's was feeling sorry for Iceland due to the volcano. It was raised, but no one takes much stock in credit rating agencies right now.

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Oil. Oil is bouncing back nicely. It sold off at the first of the week and the end of the prior week. It broke back down in its trading range, but that was short lived. It bounced back up and had a big day on Friday. ($85.10, +1.40). It is back out of the trading range. It had a test, something of an ABCD pattern, and has taken back off. There is the impulse move, the ABCD, and just when it looked like it would dive, it reversed and moved back up. That is what the ABCD pattern does for you. Oil is moving to the upside, it is back out of its range, and is looking like it will continue higher into the summer. We will have the 3.00 a gallon gas prices, don't worry, folks. I know you are all relieved to hear that.

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Gold. Gold rallied on Friday as well ($1,156.40, +13.50). It has been basing. It sold back a little over a week ago, it has recovered, and it has cleared this important peak in March making a higher high. Gold has also set up something of an ABCD pattern. There is the impulse move, ABCD, and now it is moving back up. Gold looks good. There is a lot of inflation out there you cannot have this kind of money out there without inflation. That is why the Fed says it will have to start tightening the old belt again. Even as the Fed spoke, gold still rallied. You think people are not exactly believing that the IMF is going to handle Greece and that the US is going to be able to prevent inflation? There are doubts, and I am sure you are shocked to hear that.

The other markets have been impacted all week by what has been transpiring here as well as overseas. It has been a fascinating week with respect to what China said on slowing its economy, what the Fed is talking about with tightening its belt, the Greece situation, and the other countries that are as close as Greece to having serious financial issues. This is as close right now as we were in the second half of 2008 to having a selloff. We are not out of the woods by any stretch. You have to be careful and keep an eye on what is ahead. When the stock market continues to move higher with all the money in it, being careful means keeping your money at work right now.

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TECHNICAL PICTURE

INTERNALS

Breadth. Breadth was bland just as it was on Thursday with a 1.7:1 advancers over decliners on the NASDAQ. With the SP600 in the lead on the NYSE, there was a 2.5:1 ratio. Very solid advance on the NYSE with the small caps leading the way and punching out new highs once more.

Volume. Volume fell off 10% on NASDAQ, but it was still solid at 2.35B. Volume fell on the NYSE as well, but it was at 1.2B. Still very respectable by all accounts. A lot of folks on the financial stations said it was nice to see the volume come in this week, and that is nice if things are moving up. They did move up but, over the past couple of weeks, the volume has been up but the market has not moved anywhere. That is the churn I was talking about where it is unable to make the new highs and unable to continue to the upside. You have to worry about that. High volume when the market cannot move higher after a strong run (as we have seen since the start of February) means stocks are trading hands a lot. It makes sense because the market is not going up, but there is a lot of volume. That means a lot of trading is going on, but the buyers and sellers are just trading hands no one is taking charge. The buyers have led all the way up because the market has rallied. There were more buyers than sellers. Now over the last week or two they were equal. One day the buyers would win, then the next the sellers would win and vice versa. That is a change from just the solid upside where the buyers were clearly in control. Since the volume was higher, that shows the sellers were more active; indeed, we saw them come into play on Wednesday and Thursday. They sold the market off on Thursday, but the market turned back up and the buyers won the day. And the buyers actually won the week because all of the indices broke to new rally highs on Friday and they did so on solid volume. Not increased volume, but still solid. That is a positive, and there is no writing around that. Despite the chop, the market finished to the upside with new rally highs. You cannot complain about that.


CHARTS

SP500. SP500 broke to a new rally high after nearly two weeks of lateral movement on high volume. There was some churn and distribution but also some buying. The buyers came back on Thursday and pushed the market higher, and then they broke it to a new rally high on Friday. Clearly the buyers were in a bit of trouble and the sellers exerted themselves somewhat. They tried to take control, but they were rebuffed and the buyers won the day on the SP500. They won the day and the week on NASDAQ as well.

NASDAQ. NASDAQ broke to a new rally high itself. Volume was no great shakes on Friday, but it was still above average. When you look at the Thursday reversal where it started lower, tested the 18 day EMA, and then reversed to positive, there was very strong volume. There was a very strong move and it is continuing on NASDAQ with the break to the new high. Everyone wants to look for the market to sell. We had "just in case" downside plays because it looked like the market was getting ragged. But every time the market gets ragged, the buyers come in because there is so much liquidity in the market. The Fed has not pulled it out yet. Until the Fed does pull it out or is talking about it on a daily basis, the market is still going to try to overcome the sellers and continue higher.

SP600. Stellar performance. All week there were new highs. It started with a bit of trouble but reversed intraday on Monday. Then it was higher Tuesday, Wednesday, Thursday and Friday. Impressive, impressive and did I say impressive? The small caps are leading, and that is a good barometer for the economy. There is no arguing about that as well. You can complain about it all you want, you can say this recovery is not a good recovery or as strong as others in the past. And you will be right. But things were so bad at the bottom that they could only improve. Any improvement from zero is a positive. For now, the momentum is up. We have seen earnings reports continue to come in strong with 70% of those reporting having beaten on the revenue side. In other words, there were increased sales. 85% have beaten on the bottom line, and that means earnings. That is much higher than historic norms. The momentum is there for profits with low employment levels in other words, high productivity and feeling the need to higher. The market thinks that the companies will be able to maintain those high profit levels for the next few quarters. Thus the small cap index continues to rally higher.

SOX. The semiconductors were somewhat of a laggard on Friday. They were up, but it was not quite 0.4%, and not the strong move you saw in most of the other indices. I am not overly worried about that. There was the gap higher a week and a half ago on the INTC earnings that was filled. It has moved up since then, and there are a lot of great-looking stocks in the SOX (and we own some of them). I feel decent about those and the prospects of this index. It is not overbought, and a lot of the stocks are in excellent position to move higher.

In sum, the sellers did try to influence the market. They put their cards on the table Wednesday and Thursday, and they did it the Friday before. Each time, however, the buyers were able to snatch victory from the jaws of defeat. The sellers were bluffed, they folded, and the buyers won and the market rallied. Even though volume was higher and there was churn, the buyers still outnumber the sellers. They are pushing the indices higher based upon the outlook now for the future that they still view as positive.


LEADERSHIP

Semiconductors. Semiconductors had a great week. LRCX broke higher on its earnings and continued the move on Friday. Very solid action. NVLS had a solid week, too; a modest gain on Friday, but a very good week. It broke higher already. There were a couple of strong moves, and it had good earnings. It was treated favorably on its earnings as well. The chips are strong, they are not overbought, and they still have plenty of room to run.

Retail. Retail was solid as Sears remember that old commercial? SHLD is exploding higher. We are letting those positions run. It doesn't report earnings until mid-May, so I want to just let them go. Impressive across the board in retail. ANN broke higher again on Thursday and gapped up higher on Friday. The strong get stronger. BBBY broke higher again last week and at the end of the week as well. Really all week long it was up, Tuesday through Friday, hitting new highs as it goes. Impressive strength in retail across the board. FAST is breaking higher as well. It is not a consumer retailer, but it is a retailer to the industrial and construction sectors.

Metals. Metals are still struggling. Copper is not looking good, and that is what I refer to as an ugly pattern. Steel is not looking good either. MT is not strong. The industrial metals are changing up a bit. TIE was able to rally back at the end of the week. It had a double top and looked like it could be trouble, but it might be trying to salvage itself.

Financials. Banks had a tough week, but JPM is not out of the picture. Maybe there is an ABCD pattern setting up. It is holding at the 50 day EMA and tapping there. GS is still struggling. It bounced some and is heading back down to end the week. Regional banks are decent and still holding up well in their uptrend. FITB is holding its gains, just not really strong now. It has been a tough week for banks. I would be happy being able to make it through with the uptrend in good shape.

Industrials. Industrials are mixed but looking good. CAT pulled in a new rally high. CMI had a new rally high. BUCY didn't have a new rally high, but is not in terrible shape even though it had a rough week. TEX had a nice week, and I am glad to have some of that on board. Very solid breakout, nice test, and rallying back up. Even those that have lagged are firming up a bit and helping out with other areas that have been powering higher.

Technology. AAPL surged higher on earnings Wednesday, it surged higher on Thursday, and it put in a more modest 1.5% gain on Friday. As AAPL put in that new high, it surpassed MSFT in market cap not in all the shares, but in publicly traded shares. MSFT has a lot of shares that it holds in reserve just for its owners, and it has a lot of treasury stock that is not publicly traded. Nonetheless, on publicly-traded shares, AAPL is now the market-cap king. It is kind of ironic. Years back AAPL was on the verge of going under and MSFT invested 100M dollars to keep it going because the Macintosh was not doing well. There was no iPod, there was no iPhone. When the iMac came out, it was a game-changer for AAPL. The Pirates of Silicon Valley is a fun movie to watch. It would be interesting to see a sequel to that as Steve Jobs has finally learned his lesson and is not so trusting of guys like Bill Gates. You can say he stabbed him in the back or just took advantage of poorly-worded contracts and too much trust from AAPL. For AAPL followers, they are happy to see it because they always felt AAPL was better. And they do make better products. I digress, but that is an interesting story. AAPL is flying to the moon. You have to be careful when a stock starts a ballistic move because it may be peaking out. That happened back in March. It went ballistic gapping and running higher as it is doing now, and all it did is consolidate laterally and then take off to the upside again. If AAPL continues higher, we will probably take more of our option plays off the table because there is huge gain in that. Then we will let it consolidate and see if it continues back to the upside.


THE ECONOMY

Please view the Economy Video at the following link:

http://investmenthouse1.com/ihmedia/Economy.wmv



THE MARKET

MARKET SENTIMENT

Once again the VIX has found support at the support line it hit back in 2008 (and that acted as resistance well back into 2005-2007). It has held that level and it might bounce here. There is that possibility, but it is not in any nefarious mood. There are no higher lows higher lows as the market rallies means danger. The VIX hit a level that has, in the past, resulted in market pullbacks or corrections, but not a major collapse or rollover. There could be a correction here, a consolidation after a nice run, and breaks to new highs on the indices. It is not necessarily the case because we are not seeing the higher lows, and the market action continues to be very strong. VIX gives an idea what is going on, but does not trump market action.

VIX: 16.62; +0.15
VXN: 16.6; -0.23
VXO: 15.54; +0.09

Put/Call Ratio (CBOE): 0.71; -0.05

Bulls versus Bears:

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market doesn't have the cash to drive it higher.

Bulls: 53.3%. The bulls are still running, up from 51.1%. Even with this move in the market, however, bulls are still off the 60% to 65% considered bearish. Many more bulls than in February, but they are not running away with the market and thus the market continues to rally. Not that this is a 'Green Zone' of safety; it is a level that can still spark a selloff as seen early this year. This move started at a low of 35.6% in February, the lowest it has been since July 2009. Over the 35% threshold level below suggesting bullishness. After peaking at 53 on this move the bulls lost some nerve, falling to a new low post- July 2009. Once again bulls peaked out near the 50% level. Bulls have bumped at 50ish since late August 2009, falling to 45ish and then rebounding. Hit a high of 47.7% mid-June on the run from the March lows. Again, to be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 17.4%. Pretty precipitous decline in bear sightings, down from 18.9% last week. Well off the 27.8% level on the high of this leg in February and heading toward the 15% level that is bearish for the market. Over 35% is considered bullish for the market; definitely at the lower end of the scale. Heading back toward the 16%ish on the lows of the leg where it held for several weeks. Peaked near 28% in November, falling short of the 35.6% hit in July 2009. For reference, cracking above the 35% threshold considered bullish. Hit a high on this run at 47.2%. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.


NASDAQ

Stats: +11.08 points (+0.44%) to close at 2530.15
Volume: 2.349B (-10.12%)

Up Volume: 1.605B (-212.005M)
Down Volume: 770.876M (-159.056M)

A/D and Hi/Lo: Advancers led 1.69 to 1
Previous Session: Advancers led 1.65 to 1

New Highs: 363 (+48)
New Lows: 6 (-4)

NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg

NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg

SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg


SP500/NYSE

Stats: +8.61 points (+0.71%) to close at 1217.28
NYSE Volume: 1.207B (-6.52%)

Up Volume: 791.935M (+31.133M)
Down Volume: 399.558M (-119.42M)

A/D and Hi/Lo: Advancers led 2.47 to 1
Previous Session: Advancers led 1.73 to 1

New Highs: 783 (+227)
New Lows: 59 (+14)

SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg

SP600 CHART: http://investmenthouse.com/ihmedia/SP600.jpeg


DJ30

Stats: +69.99 points (+0.63%) to close at 11204.28
Volume DJ30: 207M shares Friday versus 215M shares Thursday.

DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg


MONDAY

There are a lot more earnings out next week, and a lot more economic data. We will have to keep looking at the Greece story to see what happens, and there a possibility that more news will come out over the weekend. The IMF is going to step in and put in almost $61B by May 19th. That calmed everyone down as evidenced by the market, and it should help in the week ahead as the market focuses on other things such as the economic data here in the US. What will the Federal Reserve say on Wednesday with respect to its rates? With this be the time that it removes the extended-period language? Likely. And we have to see what happens with respect to the initial jobless claims and whether the manufacturing reports from the various regions continue to improve. With the market breaking to new rally highs on Friday, we will have to see if they are able to hold on Monday. A lot of times a surge into the Friday close turns back and reverses some on Monday. There is no problem with that. Doesn't mean it will sell off; it just means we might get a test that allows us to pick up positions.

There are still stocks that are not overbought and are coming into leadership position or have rallied well and are just testing. We can deal with that. A healthy market shows rotation as money moves from one area to another. Right now the metals are in trouble. The money has moved out of them and is moving into other areas. We continue to see that happen. We just find where the money is going, looking for places that have pulled back or that are just now coming in to join the party. You always get concerned when laggards finally join the party because things could be getting overdone at that point. Again, with this much liquidity out there, and with the Fed still having its foot on the accelerator, so to speak, we will have the ability to move the market higher. Next week could be key if it does take out the substantial or exceptional-period language. Then the market could give back some of these gains as it girds itself for the Fed starting to raise interest rates. It will have to sell a bunch of the assets that it owns right now, and that will have the effect of raising interest rates. The Fed doesn't actually have to raise rates themselves it can influence rates simply by selling the over $1T of mortgage-based securities it purchased during the crisis. There will be intrigue next week, without a doubt, and it will have a lot to do with US interest rates and the money supply.

Has anything changed? Not really. It may change depending on how strong the Fed's wording is. For now, nothing has changed, and therefore our game plan has not changed. We will continue to do the same thing we have been doing. If a stock is in good position and shows a buy, we will buy it. If it runs higher and hits a target, we will take some profits. If it doesn't hold up we will get rid of it. It may reverse and run back up after a pullback, but we are not going to take that chance right now. The market is pretty extended. It keeps running and it always tends to run further than you think it will. When they turn they turn fast. We saw that last week. The sellers threw their hat into the ring, but it just got thrown right back at them after the buyers stomped on it.

At some point the sellers will be able to wrest control from the buyers. The higher-volume churn over the past week and a half showed there was some weakening in the buyers' position. Friday they tried to put an exclamation point after the gain saying they are still here and in control. That will last for awhile, and as long as it does, we will play it. But we will be ready in case it doesn't. That is why whenever there is trouble or we see something that looks improbable, we put some of those "just in case" downside plays on the report. If there is a reversal, it can happen very quickly and we want to be able to get in and make quick gains if it does. A lot of times that first move is a vicious one. It has to set up further downside as it clears out a lot of players. We will took for opportunity to the upside, we will take gain when we have it in hand, and we will protect the downside by not letting plays get out of hand. Even with the market moving up, money does tend to rotate. Some good sectors and stocks that were performing well may become the focus of sellers and profit taking and then undergo a correction. We can hang onto stocks that we have a lot of gain built up in, after we take some off the table. You do not want to do that with options. I hate to say it, but we are going to stay the course. As soon as I say that, the course may change. We will keep looking for plays that can make us money to the upside, and if things turn, we will play that. We will continue to take what the market gives. For now, it is giving to the upside as the path of least resistance. Have a great weekend and enjoy the spring weather.


Support and Resistance

NASDAQ: Closed at 2530.15
Resistance:

2546 from July 2007

Support:
The 18 day EMA at 2469
2453 is the August 2008 peak
2412-2415 represents a series of peaks and lows in 2007, 2008
2382-2395 from 2008
The 50 day EMA at 2389
2324-2370 is a range of resistance from early 2008
2320 to 2326.28 is the January high
2319 from the September 2008 peak
2292 is a low from January 2008
2273 to 2282 marks bottom of January 2010 lateral peak
2275 - 2278 from the February 2008 and April 2008 lows
2245 from July 2008 through 2260 from late 2005.
2210 (from September 2008) to 2212 (the July 2009 closing low)
2205 is the November 2009 peak
2191 is the October 2009 peak
2177 is a low from March 2008
The 200 day SMA at 2176
2169 is the March 2008 closing low (double bottom)
2168 is the September 2009, intraday peak
2167 from the July 2008 intraday low
2155 is the March 2008 intraday low


S&P 500: Closed at 1217.28
Resistance:
1240 is the key July 2008 interim low.
1293 from a March 2008 low
1298 is the November 2008 rebound high that made a lower high. Also part of the Q1 2008 double bottom.

Support:
1200 from the July 2008 low
The 18 day EMA at 1195
1185 from late September 2008
1170 is the prior March 2010 high
The 50 day EMA at 1165
1156 is the Sept 2008 low
1151 is the January 2010 peak
1133 from a September 2008 intraday low
Bottom of the January 2010 consolidation 1131 to 1136
1119 is the early December intraday high
1114 is the November 2009 peak is breaking
1106 is the September 2008 low
1101 is the October 2009 high
1084 to 1080 (September 2009 peak)
The 200 day SMA at 1083
1078 is the October range low
1070 is the late September 2009 peak
1044 is the October 2008 intraday high
The August peak at 1040
The early October 2009 closing low at 1025
The early August intraday peak at 1018


Dow: Closed at 11,204.28
Resistance:
11,734 from 11-98 peak

Support:
11,100 from the 7-08 low
The 18 day EMA at 11,024
10,963 is the July 2008 low
The 50 day EMA at 10,789
10,730 is the January 2010 peak
10,609 from the Mid-September 2008 interim low
10,496 is the November 2009 high
10,365 is the late September 2008 low
10,285 is the late December consolidation peak
10,120 is the October 2009 peak
The 200 day SMA at 10,075
9829 is the September 2008 closing high
9918 is the September 2008 peak
9855 is the early September peak in its lateral range
9835 is the late September 2009 peak


Economic Calendar

These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.

April 19 - Monday
Leading Indicators, March (10:00): 1.4% actual versus 1.1% expected, 0.4% prior (revised from 0.1%)

April 21 - Wednesday
Crude Inventories, 04/17 (10:30): 1.89M actual versus -2.20M prior

April 22 - Thursday
Initial Claims, 04/17 (08:30): 456K actual versus 450K expected, 480K prior
Continuing Claims, 04/10 (08:30): 4646K actual versus 4600K expected, 4686K prior
PPI, March (08:30): 0.7% actual versus 0.5% expected, -0.6% prior
Core PPI, March (08:30): 0.1% actual versus 0.1% expected, 0.1% prior
Existing Home Sales, March (10:00): 5.35M actual versus 5.29M expected, 5.01M prior (revised from 5.02M)
FHFA Home Price Index, February (10:00): -0.2% actual versus -0.2% expected, -0.8% prior (revised from -0.6%)

April 23 - Friday
Durable Orders, March (08:30): -1.3% actual versus 0.1% expected, 1.1% prior (revised from 0.9%)
Durable Orders ex tr, March (08:30): 2.8% actual versus 0.7% expected, 1.7% prior (revised from 1.4%)
New Home Sales, March (10:00): 411K actual versus 330K expected, 324K prior (revised from 308K)

April 27 - Tuesday
Case-Shiller 20-city, February (09:00): 1.1% expected, -0.7% prior
Consumer Confidence, April (10:00): 53.7 expected, 52.5 prior

April 28 - Wednesday
Crude Inventories, 04/24 (10:30): 1.89M prior
FOMC Rate Decision, 4/28 (14:15): 0.25% expected, 0.25% prior

April 29 - Thursday
Continuing Claims, 04/17 (08:30): 4625K expected, 4646K prior
Initial Claims, 04/24 (08:30): 440K expected, 456K prior

April 30 - Friday
GDP-Adv., Q1 (08:30): 3.2% expected, 5.6% prior
Chain Deflator-Adv., Q1 (08:30): 0.9% expected, 0.5% prior
Employment Cost Index, Q1 (08:30): 0.5% expected, 0.5% prior
Chicago PMI, April (09:45): 59.8 expected, 58.8 prior
Michigan Sentiment, April (09:55): 71.5 expected, 69.5 prior

By: Jon Johnson, Editor
Copyright 2010 | All Rights Reserved

Jon Johnson is the Editor of The Daily at InvestmentHouse.com

Technorati tags: stock trading stock market investing Jon Johnson InvestmentHouse.com

Earnings are the Focus

SUMMARY:
- Market starts higher for a change, melts upward into the close.
- Still overlooking Greece and other Europe issues, anticipating bailouts.
- China has to act on the yuan as Chinese inflation explodes.
- With all the economic data out of the way, well most of the important ones, earnings are the focus. A rally into earnings begs a selloff on the news?
- Longer term the momentum is for a continued economic recovery through Q3 sans a Greece or other blowup.

Higher start, higher close equals new rally highs but not overly convincing.

Higher start, higher close equals new rally highs heading toward earnings.

The stock market took a different track on Friday, but it was a difference without any real distinction. Instead of starting lower like it has most sessions this week, futures were gapping up and stocks started higher. They tried to give some of the gain back early on, but there was a slow melt higher through the day with a more rapid climb in the last hour. Instead of the bullish low-to-high action intraday, there was a still-bullish high-to-higher action on the session. Often leaders seem to have excessive valuations and people will shy away from them thinking the stock is overpriced and will crash. However, when money is coming into the market in a bull run, expensive stocks can become more expensive. The market will eventually spit them out, but that is not the case right now. Once more, the market melted higher from the open and the indices posted new rally highs.

There was mixed news on Friday, but the market is definitely in the mode of whistling past the graveyard. It is looking at the positives even in the negative stories, and it is seeking out good stories. They do not have to seek to hard to find the good. The February wholesale inventories rose more than expected at 0.6%, and that was much better than the 0.1% in January. Sales rose 0.8% topping expectations as well, and inventories were up at the same time. They grew even though sales were higher, and that was a positive that helped motivate the market to the upside. It did not hurt that the dollar was down on the session; that added upside juice to the move as well. It is also the time of year to start looking at earnings. CVX said its sales were great and its margins were better than expected. That gave a shot in the arm to the energy sector. Even though oil has been surging, energy stocks have not been as strong, but they were out strutting their stuff on Friday as one of the leadership groups for the market.

It was not all great news, however. Greece is still a problem. Fitch, the rating agency, lowered Greece's credit rating to Triple B-. That is not the worst you can get, but it is not good. There were stories circulating again that there might have to be an international bailout of Greece. We are not just talking the IMF or the EU. That tells you how bad things might be over the Greece. There is a real worry that, as Greece goes, it will butcher the PIIG and roast it on the spit. That is a problem, but the market is not worrying about it. There is plenty of liquidity and good economic news in the US, and that is plenty of reason to overlook Greece for now. It could come back to haunt us, however. The market has taken the view that if there is a problem big enough to warrant concern, steps will be taken to bail out Greece. It seems like everyone is too big to fail right now, and that is a real problem for all of us. You cannot hold yourself up in the air; you have to have someone else to do it. When the last country turns to the country behind them and says "bail me out," and there is no one there, that means global troubles. I am not saying we are there, and we will not be there any time near term unless this accelerates to the point where it stalls out China, the US recovery, and India.

On Friday, it did not matter. The market was up and managed to post decent gains on the session. NASDAQ was up over 1%, and the SP500 closed up over 1% as well. There is definitely nothing stopping the assent.


OTHER MARKETS.

Dollar. The dollar was down on the session. It was struggling, and it has been since making the new break higher in late March. It came out of the second consolidation since the downtrend break and has been bouncing laterally. It has not broken down, which is a positive, but it is testing the support line once more. The dollar did lose a bit of ground (1.3496 Euro versus 1.3349 Thursday). Earlier in the week, the dollar was near breaking below 1.32 Euro very strong move, but it has given some of that back. It remains in its uptrend, but it is getting choppier. That is something it did not show as much when it peaked on its second move. It is a very important week coming up for the dollar. There is nothing to impact the dollar other than what other countries do with respect to their currencies and interest rates.

http://investmenthouse.com/ihmedia/dxy0.jpeg


Oil. Oil closed down on the session after surging earlier ($84.95, -0.44). Oil made the move higher and could not hold, but the overall picture is a trading range through early February, a breakout, and a rally. It is in test mode right now. On the lows on Thursday and Friday, notice how it tested around the 10 day EMA but snapped back each day. That shows there are buyers at this key level that was a breakout of the trading range. Oil, even though it was down, does not look like it is in trouble. The only thing that could hurt oil would be a collapse in Greece that cascades through the other PIIGS, or some trouble in China if its inflation gets out of control. That is one of the main reasons China is interested in loosening the peg on its currency somewhat; what is good for us is not necessarily good for China. With the yuan tied to the dollar, China has to seriously consider what it wants to accomplish with its currency.

http://investmenthouse.com/ihmedia/xoil.jpeg


Gold. Gold was up again slightly on the session ($1,161,+9.00). It was flat on Thursday and did give a nice test before taking off once more after breaking over the early-March peak. Gold is looking strong, and why not? There is inflation running away in China, inflation in Europe, and there could be inflation turning up here (but not yet).

http://investmenthouse.com/ihmedia/xgld.jpeg


Bonds. Bonds made a stellar recovery over the week as interest rates fell. Bond yields on Friday were slightly better with the 10 year US treasury going down a tick (3.88% versus 3.89% Thursday). Bonds recovered over this critical area, tested it on Friday, and then rebounded. Bonds have been selling because the Fed will have to raise interest rates at some point. Indeed, Hoening, the Kansas City Fed President, said that there needs to be an immediate rate hike to 1% in order to avoid the bubble that was created the last time ratings were held down artificially for such a long period of time. 1% does not seem high, but that is a start.

http://investmenthouse.com/ihmedia/tip.jpeg


TECHNICAL PICTURE

INTERNALS

Breadth. The last move late in the day really helped the advance/decline line. NASDAQ moved up to 2.5:1 while the NYSE moved up to 3.3:1. At the end of the day, it really improved with the last melt higher. You cannot make too much of it since it was just buying ahead of the weekend and some positions getting squared away, but it was no slouch nonetheless. It was something of a positive.

Volume. Volume was up 8% on NASDAQ, putting it up to 2.1B. That gets NASDAQ a bit below average trade. NYSE rose 14% up to 1.2B, and that poppeds it into the average range or a bit better. Internals were quite nice on Friday even though it looked like volume would be lower. It pulled it out of the hat at the end and posted nice-looking action.



CHARTS

SP500. The volume shown on my SP500 chart is light; it does not show the 1.2 it turned in for the session. That is more in line with what we saw on Wednesday with the stronger trade. It was a pullback through Wednesday and Thursday, then a break higher on Friday that took SP500 to a new rally high. It had support from energy and from the financial sector. When those click, SP500 will perform very well, and it is moving nicely. It is still in the uptrend above the 10 day EMA.

NASDAQ. NASDAQ had another new rally high, and it even gapped higher on the session. Volume did back off to below average, but it did have decent trade during the week. NASDAQ is moving again to that rally high, and keeping its trend of the 10 day EMA very much alive. It was choppy a week back and was a bit choppy this week, but the trend is holding out. It continues to remain overbought, yet when these rallies run, stocks can continue to remain overbought for quite some time.

SP600. The small cap index posted a 0.5% gain. It was a laggard all week, but it posted a new closing rally high on Friday. It is still moving laterally after surging higher earlier in the week, but it is hard to complain about the SP600 chart as it continues to stair-step up the 10 and 18 day EMAs. There is plenty of momentum, and MACD is still to the upside. The small caps should thrive when the economic news the better, and the economic news has been solid, all things considered.

SOX. The SOX were up over 1%, right in line with NASDAQ and the SP600, but they were unable to hit new rally highs. They stumbled during the week and fell back more than the others, but they held over the January peak and are trying to bounce from there. MACD is still rising. I think there is still more to the upside with respect to the semiconductors. We have to factor in that earning are coming. Most everyone considers the indices overbought right now, and they definitely seem to be moving on the rumor of earnings. We have to be concerned that once earnings start to come out and the rumor becomes fact, this long run may need to take a break even with decent earnings. I want us to be careful. We have to mind our positions, and if there is another spurt higher next week and into the following week, we need to think about taking quite a bit of money off the table. Good earnings may spur additional upside at first, but then as is typical when you run into earnings after awhile it reaches a saturation point for good news and investors will take money off the table. That is particularly true when there has been a run like we have had through February, March, and now into April.


LEADERSHIP

Technology. AAPL was up again on Friday. Not a huge gain, but look at the impress move after this lateral consolidation and then the rally higher. We bought in again on this move here when it broke higher, and continue to add to our positions. It is hard to stay away from the momentum. BRCM rallied sharply on Monday and spent the rest of the week pulling back, but it held the 18 day EMA and bounced higher on Friday. Very nice action, and I think there is still room to move upside for the chip stocks as well. AKAM had a nice move on Friday after a neat flag pattern on Wednesday and Thursday.

Retail. Retail was a standout again. WSM gapped higher, strong move, breakaway gap on strong volume. We saw this kind of action all week. NFLX had a strong week; it pulled back mid-week but was moving back up on Friday. There is a lot of strength in retail through all of the sectors. The restaurants were performing well. PFCB had a nice break higher, and BWLD took flight.

Energy. Energy enjoyed a very nice day thanks to CVX and it is talk of margins improving as well as sales. It was a strong move by CVX, breaking higher out of a flag pattern that pulled back over the last few sessions. UPL gapped higher and is trying to move out of this trading range that has trapped it ever since late January. I would love to see a rally near the 54-55 level out of this. With the higher volume gap to the upside, we may get it.

Industrials. Industrials had a good week. CMI gapped higher on Friday after a nice pullback during the week. JOYG is moving back up as well after a nice pullback. CAT gapped higher on Friday after a nice pullback. FWLT had a nice pullback, reverse head and shoulders, and break over the 200 day EMA. It tested, tapped the level on Thursday, and then back up on Friday.

Drugs. SCLN enjoyed a nice day with a huge break higher on big volume. The market keeps finding new leadership as money works its way around the market, looking for new areas to buy into, and sending the market further to the upside. That is a sign of a healthy market.


THE ECONOMY

Whistling past the graveyard: Greece bailout is not a sure thing.

Bailouts have been assumed by the market, and it is understandable because bailouts were a necessity in 2008 across the world. Now they are continuing. Even though there has been a recovery, a lot of European countries are in trouble and will need help, but will the rest of the countries step up? We have seen the problems Greece has had in the last couple of weeks. The EU was going to bail them out, but Germany balked. The IMF was going to come in, and then the EU did not want that to happen. Then they hammered out a deal where it would be the EU, but the IMF would be standing buy in case of an emergency. Today I heard that we might need an international solution to the problem because Europe does not want to handle it and the IMF does not want to move in unless Europe will step up as well. Greece, of course, does not want to implement the austerity programs that the IMF and EU require. Also, the Greek swaps level topped Iceland's, and Iceland and possibly the worst financial situation on the planet right now. Bond yields in Greece hit the January panic levels. Greece is trying to place bond auctions, and it cannot find the buyers. It was lucky to get 30% placement out of its last auction. Very tough getting any money, and Greece has to have money for its debts. We cannot assume there will be a bailout because everyone in Europe is punting the ball down the road and all are looking back to us in the US. No one in the US is going to go for bailing out Greece, or any of the other PIIGS for that matter (MAYBE the UK). While everyone is assuming it will happen, we have to keep our eyes open and realize it may not. If that does not occur, there will be a sharp and swift correction in all world markets including the US market.

China has to adjust the yuan as 0% US rates may be good with our 10% unemployment, but not so great for a 10% GDP growth rate.

There is another interesting point that we have to consider, and that is with China. China has tied its currency to the US dollar. Interest rates at 0-0.25% may be fine for the US with our 10%+ unemployment. It is not exactly acceptable, but there is an argument for why it should be that low. On the other hand, China has 10% GDP growth, yet its currency is pegged directly to the dollar. What is good for the US when we have no real growth and no inflation right now is not a good thing for China with 10% growth and inflation that is starting to surge. China has to raise rates and get its currency higher. There is talk that it will. Giethner talked to China this week, and it was "leaked out" that China might do something to loosen the peg on its currency. That is no surprise because China has to come to grips with this or it will have massive inflation. It has to let its currency float higher. Unfortunately, that brings inflation to the USA because we have such a large trade imbalance. Everything we would import from China will suddenly cost more the day after it floats to the upside.

In short, China has to actually do something with respect to its currency. It was very comfortable having it tied to the US dollar, but it is not practical when its economy is surging and our economy is nowhere near as strong. If China gets inflation going and one of its bubbles pop, that could be trouble for everybody. There is no doubt China is in a bubble. A lot of real estate in Beijing is empty, but the speculation continues to run. That tells you that it is speculation driving it because the real demand is not there to keep the offices full. Here in the US, bonds have recovered, but bonds will continue to sell unless there is a major worldwide crisis. The Fed will have to raise rates, and the economy continues to improve in the US.

I would like to look at some of the positives of the US economy. Our recovery has not been as strong as others and has produced no jobs; indeed, there are over 1M jobs still lost versus over 1M jobs created by this time during the 1983 recovery. There is improvement in the charts in the trucking industry. ODFL is one of our plays, and it is looking solid. Some of the rails are looking solid as well KSU is a play. Freight-per-car in rails has gone up. Starting mid-2000, it reversed from the sharp selloff and has turned roughly in a V back to the upside. Same store sales came out on Thursday. We have seen, as of late 2009, roughly a V turn around there as well. Indeed, it posted a record high of 9.1% growth. The household survey has created roughly 1M jobs in Q1 alone. That is pretty much a V-shaped recovery. Then there are the profits for corporations. They hit a V bottom in 2009 as well and now have been surging higher. Even though the US economy is slow compared to prior recoveries, it is still recovering. It is just a question of the quality. The data is showing that there will be a continued recovery for the next two to three quarters. There may be trouble at the end of the summer, but it looks like it might be extended out to the end of Q3 with these numbers. Maybe it will continue from there. The big concerns have to be whether there is some blowup overseas. Without that, the US economy is looking at a good recovery. Inflation is a problem for us, and with the higher taxes that are coming down the pipe the higher cost with healthcare, etc. there will be issues. It will make the economy stumble later but, for now, there is so much liquidity in the market and around the world getting put to work. There is recovery ongoing. Unfortunately, most of the jobs are public jobs and not private sector jobs. That will be a problem when they disappear if there is no more creation of jobs. We will have to see how it works, but things are better near term. Longer term, we still have to worry, but we can still do well in the stock market until it starts pricing in times that are not so solid.

THE MARKET

MARKET SENTIMENT

The VIX is moving down to the prior March lows even as the market overall rallies. That is exactly what you want to see: The VIX moving lower as the market moves higher. The real worry is when there are higher lows as the market moves higher; that shows much more important correction coming. If anything, the market is obviously a bit overbought. VIX is down to prior lows that undercut the early 2010 lows, so there could be a pullback, a consolidation, a modest correction. It is not indicating anything serious at this juncture.

VIX: 26; -0.51
VXN: 25.58; -1.34
VXO: 24.49; -0.94

Put/Call Ratio (CBOE): 0.98; -0.02

Bulls versus Bears:

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market doesn't have the cash to drive it higher.

Bulls: 48.9%. Inching higher from 48.3%, back to levels hit two weeks back. Still on the rise overall. Stronger but still below the mid to upper fifties from late 2009 on into January 2010 ahead of the selloff into February. This move started at a low of 35.6% in February, the lowest it has been since July 2009. Over the 35% threshold level below suggesting bullishness. After peaking at 53 on this move the bulls lost some nerve, falling to a new low post- July 2009. Once again bulls peaked out near the 50% level. Bulls have bumped at 50ish since late August 2009, falling to 45ish and then rebounding. Hit a high of 47.7% mid-June on the run from the March lows. Again, to be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 18.9%. Creeping lower as bulls creep higher. Down modestly from 19.1% the prior week. Down from 20.5% and well off the 27.8% level on the high of this leg in February. Over 35% is considered bullish for the market, so still a ways off even though bulls are falling to a bullish level. Continuing the rise from 16%ish on the lows this leg where it held for several weeks. Peaked near 28% in November, falling short of the 35.6% hit in July 2009. For reference, cracking above the 35% threshold considered bullish. Hit a high on this run at 47.2%. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.


NASDAQ

Stats: +24.82 points (+1.17%) to close at 2150.87
Volume: 2.151B (+8.05%)

Up Volume: 1.75B (+1.192B)
Down Volume: 468.772M (-991.66M)

A/D and Hi/Lo: Advancers led 2.53 to 1
Previous Session: Decliners led 1.82 to 1

New Highs: 37 (+10)
New Lows: 28 (-2)

NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg

NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg

SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg


SP500/NYSE

Stats: +13.78 points (+1.3%) to close at 1070.52
NYSE Volume: 1.239B (+14.14%)

Up Volume: 1.021B (+783.035M)
Down Volume: 181.355M (-656.274M)

A/D and Hi/Lo: Advancers led 3.32 to 1
Previous Session: Decliners led 1.72 to 1

New Highs: 68 (+10)
New Lows: 46 (+5)

SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg

SP600 CHART: http://investmenthouse.com/ihmedia/SP600.jpeg


DJ30

Stats: +150.25 points (+1.52%) to close at 10058.64
Volume DJ30: 151M shares Friday versus 159M shares Thursday.

DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg


MONDAY

There is plenty of economic data out next week, but the real focus is on earnings. We have seen the jobs report and the ISM report, and they look solid. We will continue to look at the CPI on Wednesday, which will give indication as to inflation. The retail sales for March will come out, and they are important. Initial claims are also important, as well as the regional manufacturing reports such as the Philly Fed and the Michigan Sentiment. We have seen a bunch of good news and will now be looking at earnings. We have had a rally thus far, and I think there will be a further rally into earnings. Investors are pricing in all the good news. The profits increased, and maybe there will be better sales and, of course, better bottom line at the same time. After the news becomes reality, will it continue? I think there is a good chance it will continue through the end of next week and maybe the week after that. Next week, there is just AA and some others. The guts of it comes the following week, and that could make the difference. Investors will price in that good news as they have been, and then they get the initial word and stocks pop higher. After that, it reaches the saturation point where no news is good enough to cause investors to buy further. The market is already somewhat overbought. It has had a little pullback and is starting back up.

We will definitely look for other positions to buy. Even though it is overbought, if the market continues higher, (I think that is what going to happen), it can continue to move well beyond our expectations. If there are good stocks in position, we will take advantage of them and will buy into them. We will take them for what we can, but we also have to take earnings into account. When earnings come out, there can be gaps down or gaps upside. You have to decide what you want to hold into earnings. We have a lot of positions in great shape that have gone way up on us. If you have option plays, you might want to think about banking more of the money as we were doing this past week. When you look at your plays, think about what you want to do moving into earnings. Whether you want to hold them, hold part of them, sell options, hold just stocks whatever you want to do, have a plan and stick to it. I like to hold some of my positions into earnings, and I will continue to look for upside plays because that is what the market is showing right now. We just will not take as large of positions. We will scale back going into earnings. We have already scaled back a lot of our positions by taking gain off the table, but there are new ones that have not had a chance to build that gain. As they move forward, we will have to decide whether we want to hold them. It is up to you, so think about that over the weekend. We are going to continue to look upside, but with anticipation that we will have to take money off the table (or a big chunk of it off the table) within the next two weeks. Have a great weekend.


Support and Resistance

NASDAQ: Closed at 2454.05
Resistance:
2453 is the August 2008 peak
2546 from July 2007

Support:
The 10 day EMA at 2423
2412-2415 represents a series of peaks and lows in 2007, 2008
2382-2395 from 2008
2324-2370 is a range of resistance from early 2008
The 50 day EMA at 2335
2320 to 2326.28 is the January high
2319 from the September 2008 peak
2292 is a low from January 2008
2273 to 2282 marks bottom of January 2010 lateral peak
2275 - 2278 from the February 2008 and April 2008 lows
2245 from July 2008 through 2260 from late 2005.
2210 (from September 2008) to 2212 (the July 2009 closing low)
2205 is the November 2009 peak
2191 is the October 2009 peak
2177 is a low from March 2008
2169 is the March 2008 closing low (double bottom)
2168 is the September 2009, intraday peak
2167 from the July 2008 intraday low
2155 is the March 2008 intraday low
2143 is the October 2009 range low
The 200 day SMA at 2141


S&P 500: Closed at 1194.37
Resistance:
1200 from the July 2008 low

Support:
1185 from late September 2008
The 10 day EMA at 1181
1170 is the prior March 2010 high
1156 is the Sept 2008 low
1151 is the January 2010 peak
The 50 day EMA at 1145
1133 from a September 2008 intraday low
Bottom of the January 2010 consolidation 1131 to 1136
1119 is the early December intraday high
1114 is the November 2009 peak is breaking
1106 is the September 2008 low
1101 is the October 2009 high
1084 to 1080 (September 2009 peak)
1078 is the October range low
1070 is the late September 2009 peak
The 200 day SMA at 1068
1044 is the October 2008 intraday high
The August peak at 1040
The early October 2009 closing low at 1025
The early August intraday peak at 1018
The November 2008 peak at 1006 closing 1007.53 intraday
992 is the August 2009 consolidation low


Dow: Closed at 10,997.35
Resistance:
11,100 from the 7-08 low
11,734 from 11-98 peak

Support:
10,963 is the July 2008 low
10,730 is the January 2010 peak
The 50 day EMA at 10,633
10,609 from the Mid-September 2008 interim low
10,496 is the November 2009 high
10,365 is the late September 2008 low
10,285 is the late December consolidation peak
10,120 is the October 2009 peak
9829 is the September 2008 closing high
The 200 day SMA at 9938
9918 is the September 2008 peak
9855 is the early September peak in its lateral range
9835 is the late September 2009 peak


Economic Calendar

These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.


April 08 - Thursday
Initial Claims, 04/03 (08:30): 460K actual versus 435K expected, 442K prior (revised from 439K)
Continuing Claims, 03/27 (08:30): 4550K actual versus 4630K expected, 4681K prior (revised from 4662K)

April 09 - Friday
Wholesale Inventories, February (10:00): 0.6% actual versus 0.4% expected, 0.1% prior (revised from -0.1%)

April 12 - Monday
Treasury Budget, March (14:00): $67.5B expected, -$191.6B prior

April 13 - Tuesday
Export Prices ex-ag., March (08:30): -0.2% prior
Import Prices ex-oil, March (08:30): 0.2% prior
Trade Balance, February (08:30): -$39.0B expected, -$37.3B prior

April 14 - Wednesday
CPI, March (08:30): 0.1% expected, 0.0% prior
Core CPI, March (08:30): 0.1% expected, 0.1% prior
Retail Sales, March (08:30): 1.1% expected, 0.3% prior
Retail Sales ex-auto, March (08:30): 0.5% expected, 0.8% prior
Business Inventories, February (10:00): 0.3% expected, 0.0% prior
Crude Inventories, 04/10 (10:30): 1.98M prior

April 15 - Thursday
Continuing Claims, 04/03 (08:30): 4600K expected, 4550K prior
Initial Claims, 04/10 (08:30): 440K expected, 460K prior
Net Long-Term TIC Fl, January (09:00): $19.1B prior
Capacity Utilization, March (09:15): 73.3% expected, 72.7% prior
Industrial Production, March (09:15): 0.7% expected, 0.1% prior
Philadelphia Fed, April (10:00): 20.0 expected, 18.9 prior

April 16 - Friday
Building Permits, March (08:30): 626K expected, 637K prior
Housing Starts, March (08:30): 610K expected, 575K prior
Michigan Sentiment, April (09:55): 75.0 expected, 73.6 prior

By: Jon Johnson, Editor
Copyright 2010 | All Rights Reserved

Jon Johnson is the Editor of The Daily at InvestmentHouse.com

Technorati tags: stock trading stock market investing Jon Johnson InvestmentHouse.com

Stocks Rally Early

SUMMARY:
- Manufacturing news, new quarter money, jobs report are the Thursday drivers.
- Stocks rally early, selloff, but then make a late comeback.
- World manufacturing data shows solid improvement.
- Leadership poised to move higher, e.g. semiconductors.
- Small caps, next leadership already in place to rally to 161% extension ahead of earnings season.

Stocks try to give away early gains, but rebound to the close to post gains.

The trading week ended on Thursday, but all of the excitement is not over. The market is closed Good Friday with respect to stocks, but the jobs report will still issue. The bond market will be trading, and some overseas markets will be trading as well, but the US stock market will be closed. That does not mean it will not be an important day. While I will go into the specifics as usual with respect to the Thursday session, conclusions tonight are subject to change based on what happens Friday morning. I will likely be issuing a supplement to the report that details what the jobs report said and what it portends for next week.

On Thursday, there were three main items dominating the trade. First was the manufacturing picture from around the world. The US manufacturing did not come out until after the market opened, but it was solid (59.6 versus 56.5 prior; 57 expected). It was the best increase since July of 2004. Manufacturing is once again helping lead us out of the recession. This is not a great recovery, but it is not languishing in recession. It is languishing in terms of strong (or even mediocre) recoveries in the past, but after the bottom experienced in 008 and 2009, it seems like a breath of fresh spring air blowing through the country.

The US manufacturing data came on the heels of a triumvirate of excellent data from the rest of the world. Japan's manufacturing sector rose, and China saw its manufacturing sector surge. The European Union manufacturing sector jumped; indeed, it expanded at the fastest rate in 40 months. We are looking at recovery around the world in terms of manufacturing.

Naturally, that impacted all commodities. Steel was up, copper was up, materials were up. Industrials had a better day. Anything that had to do with the build out around the world enjoyed a strong day. The second item dominating the news of the day was the new money coming in for the new quarter. Even though it is April Fool's Day and the market tried to play a joke on investors, money still came in. Stocks were up premarket and gapped higher as the market opened. There was no problem with money waiting until next week to come in and bolster the current upside trend. Looking at an intraday chart of the SPY, there was a gap higher and a continued rise as the manufacturing data came in. The third factor driving trade on Thursday: the Friday jobs report. Initial jobless claims were out before the market, and they were roughly in line with expectations (439K versus 440K expected). The prior week was revised a bit higher to 445K from 442K, so there is still improvement. While a lot of people are crowing about these numbers as indicating job creation, the numbers point to extremely tepid job creation. You are looking at around 300K-350K to really make an impact on the non-farm payrolls. We may be eking out gains right now, but they are tenuous. 184K jobs are expected, revised down from 190K. The economists are pulling in their bets a bit and are concerned after the ADP number. The weekly jobs report on Thursday helped to mitigate some of those fears, but not entirely. There is still a 9.7% expected unemployment rate. If people are feeling more confident and going back into the market, that means it would rise because there are not enough jobs to take on everyone coming back in the market. I will also be interested in the average workweek. It is expected to tick up to 33.9 from 33.8. It is very important that it continues to rally.

Back to the Friday non-farm payrolls and the impact on Thursdays trade. Looking at the chart intraday, you can see how the worry about the jobs report on Friday impacted the day. The indices rallied, but it was not even mid-morning when they hit their zenith after the ISM data. There is the spike higher and then the reversal, and that led to the selloff that accelerated as the afternoon wore on. There was a late-afternoon rally in the last hour and a half of trade that pushed the indices back to positive. NASDAQ and the growth indices had turned negative, and it pushed them back to positive and they closed with decent gain. It was not anything spectacular. There is a fight between the buyers and sellers. A lot of that had to do with the long weekend and the jobs report coming on a day when the market will be closed. It also had to do with new money coming in and the fact that the markets have rallied a long way. Some were ready to try to sell them off. At the end, that left the indices right in their range and picking up a bit of upside to make new closing highs on SP500. They are holding their range and holding their gains at this point. That is a good indication after last week when there was a intraday reversal on high volume on Thursday. More of the tale will be told next week when investors get back from the Easter holiday. We will find out whether the market will test back down to the January peak or continue on with a lateral test and make the break higher. It could also reverse, but the indices are at the 127% Fibonacci extension. With that kind of momentum after a consolidation, it tends to continue up to the 161% level. I cannot assume that will happen I am just talking about probabilities as always.

Those three factors played butted heads all session, and in the end there were modest gains. The upside came back and the trend in place held the market higher. All in all, it was not a bad session and not a bad week given last week's intraday reversal. I talked about Monday and Tuesday being important for the rally and the consolidation attempt. After all this day-to-day volatility and the intraday reversal, it looked dicey. The market held up, however, drifted higher to end the week, and left itself in good position to continue higher or make a test and then continue higher next week.


OTHER MARKETS.


Dollar. After having one of its best weeks in a long time, the dollar gave a lot of it back this week. It tried to make a surge on Thursday, but it just was not happening. It was not the dollar's week, and it finished down once more (1.3585 Euro versus 1.3510 Wednesday). It had broken below 1.35 and was trading easily in the 1.34 range, but it was not able to make that move stick and is now back down. It is still in this range of support and above the trendline it started after breaking the long downtrend. I do not expect the dollar to break down; I expect an improving economy to continue to bolster the dollar. It has had a long downtrend. It is still in a recovery mode and is not showing a lot of wear and tear. It is surprising that it came back to test so immediately after this nice consolidation that matches the initial consolidation when the trend was broken. Strong surge, sold back, but it is still in a flag pattern. It looks like it could give dollar traders a point to enter on a move back up over the upper range line, or maybe all the way the peaks from March. The dollar is not in serious trouble but just had a tough week. Other currencies such as the Euro are doing better because there was better news coming out of the EU. There was no dire news out with respect to Greece, Spain, Portugal, Italy, Ireland, or the UK. I still expect the dollar to move higher.

http://investmenthouse.com/ihmedia/dxy0.jpeg


Oil. I said oil would break out of its range, and it did. I am not playing the break to the upside, but we will let it test. When there is a break out of a significant range, there is a spurt and then a test. When it tests, you close out DUG. If the test holds and starts to bounce back up, then you go into the DIG or another oil proxy to play that move. Oil was strong ($85.10, +1.34). It bounced around a lot after the market closed, but it has officially broken out of its range no matter where you put the range line. Nice breakout, good strength. We let it make the test, and when it does, we will play it off that level. Oil is going to go higher as well as gasoline. I filled up all my gas tanks when it dropped a bit and now will watch it run higher.

http://investmenthouse.com/ihmedia/xoil.jpeg


Gold. Gold enjoyed a nice week. After selling off the prior week, it was all upside for gold ($1,126.40, +11.90). It is still in the pattern and still basing out after the strong run through December. For a longer term play, I am looking for what happens when gold gets back into this range whether it says around $1,145. I expect it to consolidate in the $1,145-1,150 range, and it may move laterally. When it makes a break higher, that is when you want to move in for the run up to the old high indeed, the old closing high at $1,215. Gold had a good week and is setting up for the break higher.

http://investmenthouse.com/ihmedia/xgld.jpeg


Bonds. Bonds sold back again on Friday. The 10 year closed up (3.86% yield versus 3.83%). One would anticipate bonds to sell as the economy improves, and that is what happened with the gap down. It is holding at the 200 day EMA, but that keeps the bond market below key support levels. That is what I am really watching here. It broke out of this range, and it may not be able to recover again. Bonds may be done for now, and we will see higher and higher yield and lower and lower prices.

http://investmenthouse.com/ihmedia/tip.jpeg

You would expect higher yields because the economy is improving and because we are still printing a lot of money. There will be inflation. European inflation rose 1.5% in March that is a significant jump. We are printing as much money as they are, so we will likely follow them in the near future. Overall, the other markets are acting as you would expect in conjunction with the stock market on improving economic data. While there is not radical or dynamic improvement, it is a solid enough improvement coming off of that terrible low; there will be improvement across the board in all the markets. I said there would be a recovery, it is just the strength of the recovery and how dynamic it is. This one is not that strong, but it is still a recovery still. Coming out of the 1982 recession, at this point there were already over 1M jobs created. Now we are still losing jobs, but that is likely to change on Friday. We will probably create jobs, but will it have any longevity? There are 100K jobs for the census, 100K attributable to catching up for lost jobs during the bad weather, and maybe a few more thrown on top of that for general economic recovery. Will it show up again later in the summer after all the census workers are laid off? It remains to be seen, but we are in a nice, slow recovery.



TECHNICAL PICTURE

INTERNALS

Breadth. It was 3.1 advancers over decliners on the NYSE, and a mediocre 1.3:1 advancers over decliners on the NASDAQ. NASDAQ was definitely a laggard.

Volume. In the NASDAQ, volume was higher at 2.2B shares, and that puts it back above average. On the other hand, the NYSE saw a 20% decline in volume, back below 1B shares at 918M. Not a great showing. A cause for a lot of the volume on NASDAQ had to do with earnings issues for stocks. RIMM saw a big jump in volume as it gapped down on earnings problems.


CHARTS

SP500. The SP500 had low, below-average volume on a rise that saw it make a new closing high in the rally. There was no significant change to the pattern? It is still in a lateral consolidation and it rose with the trend ahead of the three-day weekend. Next week will tell whether or not there is a test back down to 1151 or just more of a lateral consolidation. It may even hold at the 10 or 18 day EMA before breaking higher and moving toward the 127% Fibonacci extension.

NASDAQ. NASDAQ enjoyed stronger volume, back up to average as it traded in a wild range on the session. It is holding rather flat on the close, managing to say above the 10 day EMA as it does so. NASDAQ is bumping at the 127% Fibonacci extension, and if it holds this lateral move and makes the break, that could run it up another 100 points to the 161% level at 2515. There is still plenty of upside if the probabilities hold.

SP600. The SP600 saw similar action. It is in a nice lateral test. This is a strong move, but there is a little volatility. There was a reversal, but it has held on nicely above the 18 day EMA and formed a flag pattern. The small caps are looking good, and they should be with the economy improving. I just wish there were more jobs and more small businesses coming online. The small caps are already above the 127% Fibonacci extension and have come back to somewhat test that level. They are ready to make the move up to the 161% level at 357. They closed at 363. They are at the point to move higher, and as they led the rest of the market to the upside, we could very well see the small caps take the point again next week and lead the other indices to the upside and the 161% level extension.

SOX. The chips have played catch up and done a good job of it over the past few weeks. SOX is moving laterally at the January peak, trying to break through. It tried to make the move on Thursday and was thrown back as it did over a week back, but it is holding above the 10 day EMA. If the small caps make the break, it could be that the semiconductor index makes the turn higher and follows. We have a play on the semiconductor index. If it makes the break higher, we will follow it in.


LEADERSHIP

Metals. MT gapped higher, and we are enjoying or position in that. FCX gapped away earlier, and it is still moving higher. I would like to get a shot at it on a test. Industrial metals were also performing well. BHP gapped over a consolidation range and made a new closing high. There was not a lot of volume, but it is making the move.

Industrials. Industrials were decent, but they were not huge. CAT posted a new high on this particular leg of the rally. TEX had a decent day as well, and it surged up on decent volume for the second day in a row. It still has to conquer the prior peaks, and it has not done it quite yet.

Energy. Energy enjoyed another good day. It is finally catching up to the oil price, although oil is at a new high and not all of these stocks are. CVX is continuing higher. APC broke to a new rally high on its own. There are nice moves happening. I was looking at some of the drillers; they have been gapping higher, and we will see how they set up after this initial move. DO is making its second day of gaps after the news came out that the Obama administration would open some of the offshore lands to drilling in the future. They may or may not be tied to cap and trade legislation.

Technology. Technology had a relatively difficult session. RIMM missed its earnings and was down. AAPL eked out a gain, but it was indecisive after a pretty strong week. GOOG has had its woes with China, but it looks like it is finding its feet and started to move back up.

Retail. Retail has been the juggernaut. After a lateral consolidation, ANN broke higher on volume. The buyers are still moving in. WSM had a strong move, a nice flag, and it is starting to break higher. That may present a play for us. BWLD had a strong break higher, cleared the January and February peaks, and it has now come back to test them. It is showing a big doji, reaching down and reversing on Thursday. If it gets a break, we might catch a play on this stock that tends to run rapidly when it gets its legs beneath it.

Semiconductors. LRCX tried to make the break. It was not the day for it, but it still set up nicely. NVLS tried to make the break, but it could not hold it on the day. It still set up nicely. BRCM also tried to make the break over the downtrend in the flag pattern, and it could not quite hold it. All of these look ready to move next week if the market decides it has had enough pullback and is ready to move. All of these stocks are in position to make that move. Looking at the leaders, and if they are ready to make the move, that gives insight as to what the market will do. Next week will tell the tale as to whether the indices will test further or make the next break higher. Semiconductors that have rallied as the semiconductor index bumped up against the prior high have already made pullbacks over the last week to two weeks. They are ready to make their move right now and ready to assume a leadership role if they make the break higher. We have plays on all of them and are ready to go. If they make the break higher, we will be in them. The rest of the market will follow, they will make the move up to the 161% Fibonacci extension, and then we will look for a more serious pullback. It will not be a major selloff, just more of a serious pullback that sets up something like the ABCD pattern. After a long run, a stock will set up that ABCD pattern that consolidates the move, shakes out some sellers, and then continues the run higher in the direction of the original trend.


THE MARKET

MARKET SENTIMENT

VIX: 17.47; -0.12
VXN: 18.76; +0.44
VXO: 16.16; +0.12

Put/Call Ratio (CBOE): 0.9; +0.09

Bulls versus Bears:

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market doesn't have the cash to drive it higher.

Bulls: 48.3%. Lower but holding high levels near the 48.9% the prior week. On the rise overall though still below the mid to upper fifties from late 2009 on into January 2010 ahead of the selloff into February. This move started at a low of 35.6% in February, the lowest it has been since July 2009. Over the 35% threshold level below suggesting bullishness. After peaking at 53 on this move the bulls lost some nerve, falling to a new low post- July 2009. Once again bulls peaked out near the 50% level. Bulls have bumped at 50ish since late August 2009, falling to 45ish and then rebounding. Hit a high of 47.7% mid-June on the run from the March lows. Again, to be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 19.1%. Bulls higher, bears continue lower, down from 20.5% and well off the 27.8% level on the high of this leg in February. Over 35% is considered bullish for the market, so still a ways off even though bulls are falling to a bullish level. Continuing the rise from 16%ish on the lows this leg where it held for several weeks. Peaked near 28% in November, falling short of the 35.6% hit in July 2009. For reference, cracking above the 35% threshold considered bullish. Hit a high on this run at 47.2%. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.


NASDAQ

Stats: +4.62 points (+0.19%) to close at 2402.58
Volume: 2.201B (+0.56%)

Up Volume: 1.035B (-3.597M)
Down Volume: 1.149B (-31.418M)

A/D and Hi/Lo: Advancers led 1.32 to 1
Previous Session: Decliners led 1.65 to 1

New Highs: 155 (+35)
New Lows: 18 (-7)

NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg

NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg

SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg


SP500/NYSE

Stats: +8.67 points (+0.74%) to close at 1178.1
NYSE Volume: 918.664M (-20.19%)

Up Volume: 780.473M (+388.028M)
Down Volume: 127.997M (-609.912M)

A/D and Hi/Lo: Advancers led 2.96 to 1
Previous Session: Decliners led 1.41 to 1

New Highs: 443 (+225)
New Lows: 53 (+28)

SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg

SP600 CHART: http://investmenthouse.com/ihmedia/SP600.jpeg


DJ30

Stats: +70.44 points (+0.65%) to close at 10927.07
Volume DJ30: 159M shares Thursday versus 197M shares Wednesday.

DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg


MONDAY

There is a lot of economic data out, but all of it is somewhat in the shadow of the Friday jobs report. We will have ISM services, pending home sales (something that is always watched closely). There will be FOMC minutes and just how many of them are talking about raising rates. There will be continuing claims on Thursday along with initial claims. Those are the main reports that are out, but we will also have earnings to deal with. It is the start of April, so there will be more warnings, positive of negative. The first earnings will come out toward the end of the week. We have been taking positions moving into these results because stocks are showing gains. They were showing the queues to buy them even though we are getting closer to earnings. Even though earnings are just around the corner and we do not necessarily want to be heavily invested at that time, if stocks say it is time to buy, we will buy.

We may get that run toward earnings. Stocks have consolidated over the past two to three weeks. They are at the 127% Fibonacci level and ready to make the move up to 161% level. As we saw with the patterns in the semiconductor indices, they are ready to make the move. They want to run up ahead of earnings, so they could give that push toward the 161% level. What will drive it? They are anticipating earnings, but there is also the first-of-the-quarter money. Some of it came into the market on Thursday. Volume was up on NASDAQ, and it did start out with new money coming in. When everyone is back in the game next week, there should be more money put to work. That could be the catalyst along with these good patterns that generate the move up to the 161% level. If new money comes in on Monday and we see that will be the case if the jobs report is not a clinker and hurts the market, then we could definitely get the run up to the 161% level ahead of earnings. That would be the perfect scenario to rally up to that point, let the positions we took early this week make good moves, take some gain on them, and take some new positions in stocks like the semiconductors that are ready to move up. We already have plays on them ready to go. We will let them make their run and, if they do that, we are in position to take more gain ahead of earnings. We can book that gain and then, if the stocks are in good position and we feel like riding some of the plays through earnings, we can do that with a reduced amount of exposure. If they hit a home run and move higher, great. If they do not, we do not take the hit as hard and are still in decent shape and coming out ahead.

There are many factors converging right now that could send the market back up to the next resistance level at 161%. There is a new crop of leaders that have pulled back already and are in position to move higher. There are the small caps looking as if they will make a break higher because that index has already pulled back and looks like it is ready to make its move. New money is ready to come in. There has been the pullback ahead of earnings, and a lot of times stocks will run into earnings and the first week where, if good news hits, investors continue to bid prices up until they get their fill of good news. There is a saturation level, and then the market starts to fade back. By that time, we will have taken gain and will be in a lightened-up position having banked gain and enjoying the ride higher. We have the catalysts, and we will let our positions run. We will take new positions when the market tells us to do so. We will then enjoy the ride higher, take some gain before we get deep in the earnings season, and then probably get more of a pullback into something of that ABCD pattern. We will then see if it sets up, reloads, and does it all again. Have an excellent weekend.


Support and Resistance

NASDAQ: Closed at 2402.58
Resistance:
2412-2415 represents a series of peaks and lows in 2007, 2008
2453 is the August 2008 peak

Support:
2382-2395 from 2008
The 10 day EMA at 2395
2324-2370 is a range of resistance from early 2008
2320 to 2326.28 is the January high
2319 from the September 2008 peak
The 50 day EMA at 2312
2292 is a low from January 2008
2273 to 2282 marks bottom of January 2010 lateral peak
2275 - 2278 from the February 2008 and April 2008 lows
2245 from July 2008 through 2260 from late 2005.
2210 (from September 2008) to 2212 (the July 2009 closing low)
2205 is the November 2009 peak
2191 is the October 2009 peak
2177 is a low from March 2008
2169 is the March 2008 closing low (double bottom)
2168 is the September 2009, intraday peak
2167 from the July 2008 intraday low
2155 is the March 2008 intraday low
2143 is the October 2009 range low
The 200 day SMA at 2125


S&P 500: Closed at 1178.10
Resistance:
1185 from late September 2008
1200 from the July 2008 low

Support:
1170 is the prior March 2010 high
The 10 day EMA at 1168
1156 is the Sept 2008 low
1151 is the January 2010 peak
1133 from a September 2008 intraday low
Bottom of the January 2010 consolidation 1131 to 1136
The 50 day EMA at 1135
1119 is the early December intraday high
1114 is the November 2009 peak is breaking
1106 is the September 2008 low
1101 is the October 2009 high
1084 to 1080 (September 2009 peak)
1078 is the October range low
1070 is the late September 2009 peak
The 200 day SMA at 1061
1044 is the October 2008 intraday high
The August peak at 1040
The early October 2009 closing low at 1025
The early August intraday peak at 1018
The November 2008 peak at 1006 closing 1007.53 intraday
992 is the August 2009 consolidation low


Dow: Closed at 10,927.07
Resistance:
10,963 is the July 2008 low

Support:
10,730 is the January 2010 peak
10,609 from the Mid-September 2008 interim low
The 50 day EMA at 10,563
10,496 is the November 2009 high
10,365 is the late September 2008 low
10,285 is the late December consolidation peak
10,120 is the October 2009 peak
9829 is the September 2008 closing high
9918 is the September 2008 peak
The 200 day SMA at 9875
9855 is the early September peak in its lateral range
9835 is the late September 2009 peak


Economic Calendar

These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.

April 01 - Thursday
Challenger Job Cuts, March (07:30): -55.0% actual versus -77.4% prior
Continuing Claims, 03/20 (08:30): 4662K actual versus 4618K expected, 4668K prior (revised from 4648K)
Initial Claims, 03/27 (08:30): 439K actual versus 440K expected, 445K prior (revised from 442K)
Construction Spending, February (10:00): -1.3% actual versus -1.0% expected, -1.4% prior (revised from -0.6%)
ISM Index, March (10:00): 59.6 actual versus 57.0 expected, 56.5 prior
Auto Sales, March (14:00): 3.7M prior
Truck Sales, March (14:00): 4.2M prior

April 02 - Friday
Nonfarm Payrolls, March (08:30): 184K expected, -36K prior
Unemployment Rate, March (08:30): 9.7% expected, 9.7% prior
Average Workweek, March (08:30): 33.9 expected, 33.8 prior
Hourly Earnings, March (08:30): 0.2% expected, 0.1% prior

April 05 - Monday
ISM Services, March (10:00): 53.6 expected, 50.0 prior
Pending Home Sales, February (10:00): -1.0% expected, -7.6% prior

April 06 - Tuesday
Minutes of FOMC Meeting, (2:00)

April 07 - Wednesday
Crude Inventories, 04/03 (10:30): 2.93M prior
Consumer Credit, February (3:00): $1.6B expected, $5.0B prior

April 08 - Thursday
Continuing Claims, 03/27 (08:30): 4662K prior
Initial Claims, 04/03 (08:30): 433K expected, 439K prior

April 09 - Friday
Wholesale Inventories, February (10:00): 0.3% expected, -0.1% prior

By: Jon Johnson, Editor
Copyright 2010 | All Rights Reserved

Jon Johnson is the Editor of The Daily at InvestmentHouse.com

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