9:00am (EST)

“Although this week is historically bearish, we could see some “window-dressing” by the fund managers which means they will be buying stocks early in the week.  We still feel the market is close to peaking but we wouldn’t be surprised to see one last run at our near-term targets (Dow 13,500; S&P 1,425-1,450; Nasdaq 3,250; Russell 850) if there is a rush to buy this week.

We could also see a trading range this week before we get the surge in April which is typically one of the best months of the year for the market.  Over the past decade, the indexes have gained 2%, on average, in April and if support holds this week, there is a good chance history repeats itself.  However, we aren’t too bullish on 1Q earnings which will start to come in during the second week of April” (3/25/2012 Weekly Wrap/ Monday Morning Outlook)

The bulls held support and continued with their winning ways last week following the “Bernanke Bounce” on Monday.  The major indexes rallied 1.5%, on average, after hearing the Fed Chairman say supportive monetary policies would remain in place and that another round of quantitative easing could be a possible.  Ben Bernanke said the U.S. economy would need to grow more rapidly to produce enough jobs to further bring down the unemployment rate (which comes out this Friday).  This spurred a huge relief rally following the prior week’s slight pullback as the market reached fresh 52-week highs.

The bulls came close to our aforementioned near-term targets as the momentum continued into Tuesday’s open.  However, the momentum faded late in the day as a late session sell program hit Wall Street.  The Dow was able to finish in positive territory but the S&P 500 and Nasdaq couldn’t escape the bears attack as both indexes ended the day with slight losses. 

Wednesday’s futures were showing a continued pullback as the bears looked poised to crack another layer of support following weaker-than-expected economic news from overseas.  They did at the open as the market fell over 1% when trading got underway.  The Dow fell to a low of 13,069 while the S&P dipped under the 1,400 level before both indexes bounced back by the closing bell.

Thursday’s action was more of the same in the morning as lighter-than-expected economic news muddied the waters.  Initial Claims fell 5,000 to 359,000 versus expectations for a drop to 350,000 but the previous week’s numbers were “revised” which accounted for the slight miss.  Meanwhile, fourth-quarter Gross Domestic Product (GDP) increased 3.0%, which matched forecasts while Personal Consumption increased 2.1%, also in-line.   Wall Street must have realized this after their lunch break as the indexes rebounded sharply in the second half of trading and into the close.  The Dow was able to squeak out a small gain while the Nasdaq and S&P suffered only minor losses.  This led us to believe that Friday was going to be a good day as the market was on the verge of booking one of the best quarters we have seen in quite some time…

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