Mixed Economic Data Helps Lift Markets, No Reason For Fed To Pull Punchbowl:
The S&P 500 broke out of a tight range today to close higher and neared the all-time high of 1,565 today as sentiment among traders shifted. The S&P 500 has been rangebound for the past few sessions and made it harder for traders to stay in positions with conviction. A late day breakout occurred which put the S&P 500 a point away from the all time high and it closed at 1,5633.77.
News from the European region subsided with no 3:00 rumors or reports that were able to stop the market from going higher. We are bullish in the short-run but this rally may be overextended and although we aren’t calling for a correction, a pullback is possible after the market moves past the new high. We expect a parabolic move upward if the next leg of the rally is for real however, stocks are due for some distribution.
Economic data wasn’t particularly good today. The Conference Board’s index of consumer sentiment fell to 59.7 in March 2013 from a downwardly revised 68 in the prior month. This was way below economists’ expectations of 68. Home prices rose to the highest levels since the crisis began in 2007-2008 based on data released today from the Case Shiller Index showing year over year January changes. When stocks move on mixed economic data, this is a positive sign the market could remain in rally mode longer. We would still maintain caution at any sign of weakness.
U.S. Stock Market Major Index Statistics for March 26, 2013:
DJIA 14,559.65 111.90 0.77%
NASDAQ 3,252.48 17.18 0.53%
S&P 500 1,563.77 12.08 0.78%