The bulls are working on recovering Wednesday’s losses and got off to a great start this morning. Once again, better-than-expected economic news played a role in the pop at the open but a couple reports came in worse-than-anticipated which cut the gains in half.
The good news is the jobs market continues to “improve” as Initial Claims fell to 351,000 versus expectations for 355,000. Continuing Claims came in at 3.4 million which was just below a forecast for 3.41million. Personal Income for January was up 0.3% versus expectations for an increase of 0.5%. Personal Spending was up 0.2% which was slightly below the expected increase of 0.4%.
Elsewhere, Construction Spending fell 0.1% in January which was a surprise as the suit-and-ties were looking for an increase of 1.0%. The one that hurt the bulls was the ISM Manufacturing Index which came in at 52.4, which was below Wall Street’s forecast for a print of 54.5. Still, anything over 50 is a positive so things weren’t all that bad.
Bernanke is speaking today but he hasn’t spooked the market like he did yesterday.
The push higher is a good sign and some of it can be attributed to fund managers putting money to work. Yesterday’s pullback scared a lot of pros out of the market as many of them took their 15 minutes of fame and said the market pulls back.
We have seen dozens and dozens of these knuckleheads come on the tube across the various business channels since January and all of them have been wrong. Sure, at some point we will get a pullback but nobody can time it perfect. We are on the other side of the fence and have our fingers crossed for one last blow-off the roof type rally as the market’s gains for the year have come slow-and-steady.
One sweet 2% pop higher would be beautiful before St. Patty’s day but we are taking profits as they come as we position for the market’s next move.
We have more good news for another one of our current call option trades which is up over 90% in just 2 weeks. We are going to take some profits in this trade as well today and we have a NEW TRADE we are releasing right now so let’s go see if we can get filled!
As we head to press, the Dow is up 49 points to 13,001 while the S&P 500 is advancing 9 points to 1,375. The Nasdaq is higher by 24 points to 2,991. Subscribers, check the Members Area for the updates.