Thursday, April 11, 2013

Stocks Extend Gains Closing Higher for the 4th Straight Session

This week has favored the bulls as the market closed higher with gains for the fourth straight session. Volume ended mixed falling on the NYSE while running higher on the NASDAQ. A report on PC sales sent the likes of $MSFT, $INTC, and $HPQ lower putting pressure on the NASDAQ. Jobless claims were better than expected a far cry from last week’s big disappointment. Import prices fell more than expected showing inflation has yet to show up despite the Federal Reserve’s 80+ billion a month easing program. Our uptrend remains intact and it will take quite a bit to knock this market off its uptrend. Sentiment has made a big jump this week. II survey continues to favor more bulls with more than 50% of its respondents are bullish with just 20% in the bear camp. The big jump came from the AAII survey with almost 55% responded as bearish. A big jump week over week with last week’s Non-Farm Payrolls likely to be blamed for the overly bearish reading. AAII are individual investors and are more likely to flip flop on their views of the market much more than the II survey. I can’t remember ever a time where AAII bears were more than II bulls, but yet we have it here. We don’t care if this is good news or not for our uptrend, it is quite amusing to see the disparity between the two camps. Tomorrow we’ll get a read on Advance Retail sales and for some reason I get the feeling they’ll be better than expected. $XRT certainly says it will be better! However, $JPM and $WFC release earnings prior to the retail figures. Many banks have been lagging the overall market and we are about to get a heavy dose of earnings releases from the group. We have noted before the banks have provided the S&P 500 with the lion share of earnings growth last year and analysts are expecting the same for this year. Tomorrow we’ll get the first view of how bank earnings could be shaping up for the first quarter of 2013. We are in an uptrend and we’ll favor the long side of the market. Until we get heavy distribution and leaders falling we’ll get neutral. Until then, we are full steam ahead on the long side.

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