Stocks Advance as the Euro Rebounds

Stocks approach 2010 highs as European Debt fears subside

A bigger drop in jobless claims then expected, did not stop the market from pushing higher closing just off the highs of the session. What did help the market was a jump in pending home sales figures suggesting buyers were out procuring new homes. Preliminary volume figures showed volume dropped on the day, but the underlying action was still poisitive. Financial and retail stocks were the big winners of the day as the European debt crisis fears subsided giving a boost to banks. Along side the rise in the market was the Euro stabilizing after its most recent run in with sellers. Leaders acted well today and the market had a decent follow-through from yesterday’s action.

It would have been better to see volume jump on the day as if institutions were rushing in to gobble up shares of stocks. Unfortunately, we may be seeing a similar story as we did last year with the market pushing higher without volume. The strong price action is enough to override the lack of volume we are seeing in the overall market. Again, pay attention to your stocks.

Bullishness once again jumped as the survey out of AAII showed bulls heading to 49.66% and bears at a lonely 26.21%. Bulls are off of their highs just from a few weeks ago, but the recent Euro news and market reaction failed to scare bulls from their positions. Perhaps this is the reason why we saw the market hold up on its 50dma. For whatever the reason the fact remains the market still is in position to push back into new high territority before any substantial move lower.

Tomorrow’s headlines will certainly highlight the jobs report set to be released at 830am EST. The market so far appears to be pricing in a decent report showing gain of 145k jobs. This week the market saw a better than expected rise in private payrolls from ADP and an upside surprise tomorrow should help the market. However, we aren’t in the guess/gambling game. We’ll take our clues from our stocks and act accordingly. Panic buying and selling only nets you red in your portfolio. Stick with your market leaders and use their action to navigate the market waters. Remember, “thinking” in this game is a dangerous thing.

Cut your losses and enjoy the weekend ahead.