Dow Has First 9 Day Winning Streak Since 1996 On February 2013 Retail Sales, Traders Cautious

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Dow Has First 9 Day Winning Streak Since 1996 On February 2013 Retail Sales, Traders Cautious:

When will we start talking about the Fed again?

Traders picked up on upward momentum in midday trading as the Dow rose marginally in a cautious trading environment. The Dow Jones Industrial Average barely gained for the day closing at 14,455 rising 5.22 or 0.04%. The NASDAQ closed up 2.8 to 3,245.12 while the S&P 500 was up 2.04 to end the day at 1,554.52.

Many traders are expecting the S&P 500 to hit new all-time highs but the relatively low follow through after the Dow hit recent new highs is a reason to be bearish in the medium run. Retail sales numbers released today showed consumers are back in spending mode but much of the gains came from gasoline sales and isn’t a sure sign the economy is in expansion mode just yet.

The Commerce Department said on Wednesday February 2013 retail sales increased 1.1 percent which was the highest increase since September and January 2013 was revised to an increase of 0.2 percent.  The February 2013 retail sales number was better than economists were expecting and the turnaround in some of the recent economic data suggests the Fed may need an exit strategy sooner than later.

We predicted unemployment would fall in the 6 percent range by the end of the year but the Fed doesn’t believe this will happen until 2016.  The Fed has been a bit behind the curve before and at present, we seem more right than wrong.  If we are right, the Fed should have started a QE exit strategy already.  March unemployment numbers could be the beginning of a signal change.

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