Bulls Calling It; Correction Is Over

 

Publishing Note: Dave is traveling with my family this week but we've got you covered on the important news, happenings, and market-drivers in his absence.

Stocks advanced again on Friday in response to largely better-than-expected earnings news and an upward revision to U.S. Q4 GDP. The country's economic growth rate came in at +3.1%, which was above the consensus expectations for a reading of +2.8% and last quarter's +2.6%. The continuation of the rally caused the major indices to snap a two-week losing streak and caused many analysts to come to the conclusion that the recent corrective phase may be coming to a close.

The most positive aspect of the action last week was that traders moved their focus away from the headlines out of Libya and Japan, and returned to the fundamentals and macro view here at home. From a technical perspective, the bulls were able push the indices up through important resistance zones, which allows for some backing-and-filling to occur from here without negatively impacting the charts.

While the bears will argue that there is resistance overhead and that a retest of the lows is a possibility at any time, the charts remain constructive at this point in time.

Turning to this morning... The headlines report new radiation problems at the Fukushima Dai-ichi nuclear plant, the rebels advancing in Libya, and a defeat for German Chancelor Angela Merkel's party at a regional election in Germany.

On the Economic front... Personal Incomes rose by +0.3% in February, which was in line with the consensus expectations for an increase of +0.3%. The January level was revised higher to +1.2% from +1.0%.

Personal Spending (now called “Consumption”) for the month rose by just +0.7%, which was above the expectations of +0.5% but below January’s revised reading of +1.3%. (December: +0.5%, November: +0.4%, October: +0.7%, September: +0.3%, August: +0.5%).

The Core PCE (think inflation) came in up +0.2%, which was in line with expectations for +0.2%.

Next up is the Pending Home Sales number, which will be released at 10:00 am eastern. But remember, that the monthly Jobs report is due out on Friday.

Pre-Game Indicators

Here are the Pre-Market indicators we review each morning before the opening bell...

• Major Foreign Markets:
  • Australia: -0.17%
    
  • Shanghai: +0.21%
    
  • Hong Kong: -0.39%
    
  • Japan: -0.60%
    
  • France: -0.04%
    
  • Germany: -0.15%
    
  • London: +0.12%
  
  
• Crude Oil Futures: -$1.09 (May contract) to $104.31
  
• Gold: -$14.40 to $1411.80
  
• Dollar: lower against the Yen, higher versus Euro and Pound
  
• 10-Year Bond Yield: Currently trading at 3.480%
  
• Stocks Futures Ahead of Open in U.S. (relative to fair value):
  • S&P 500: +3.10
    
  • Dow Jones Industrial Average: +31
    
  • NASDAQ Composite: +8.10

 

P.S. Stay up to speed on the markets and TSP Research with TSP email alerts! You can receive alerts for up to 26 free research report alerts including:

• FLASH Headline Alerts: Get an executive summary of the really important market-moving headlines
  
• Quick Hit Commentaries: Short and to the point, we break in during the day with key insights to the action
  
• The “10.0” Report: These are the REAL Best of Breed companies
  
• The Insiders Report: Want to know which stocks Corporate Insiders are buying heavily?
  
• ETF Leaders Report: Don’t Miss TSP’s Weekly ETF Leaders Report
  
• TSP’s Daily TopStock Focus List: It’s Your Own Private Research Department
  
• The Daily Stock Pick: Our daily stock pick highlights one of our favorite TopStocks that also presents a good entry point at the present time.

To Add or Remove email alerts, simply Login to Your Portfolio and click on Email Alerts

 

The opinions and forecasts expressed are those of David Moenning, founder of TopStockPortfolios.com and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStockPortfolios and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

The information contained in our websites and TopStockPortfolios publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.

Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.

Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.