Friday, May 16, 2008
Pay Day!
Well the SPX certainley bounced off its trend line this week and seems to be moving higher. Despite poor economic news this week the SPX has bounced. On Thursday the Dow gained 94.28 points to close the session at 12,992.66. The SPX added 14.91 points to close at 1,423.57. Yesterday was the last day of the play and we are deep in the green and we look like we have another winner!! The SPX hasn't settled yet but the futures are not suggesting the SPX will open up over 39 points this morning!
Economic news was abundant Thursday with most the data showing weakness. There were two regional manufacturing reports in the form of the Philly Fed survey and the Empire State Mfg. survey. Both reports showed contraction with the Philadelphia region seeing its index remain in negative territory at -15.6. This was slightly better than anticipated, but shows that sluggishness remains. This was further supported by the industrial production report, which showed a decline of -0.7 percent, 4-tenths worse than expected. In the past year, industrial production is up 0.2 percent, which is well below the 1.4 percent gain seen in the prior month.
The housing market index continued to show weakness, falling one point to 19 in May. The low for this index came in December at 18, but was trading at 33 one year ago. Buyer traffic was weak, falling two points to 17, a sign that the bottom for housing isn’t here yet. Housing starts are due out tomorrow and are expected to show an annualized rate of 940,000 units.
For the most part, the major market indices remain below resistance at their respective 200-day moving averages. It will be interesting to see how stocks fare to end the week and if the bulls can finally find the strength to push through the resistance.
As for what we will do going forward, well the June expiration cycle is five weeks.....a long time so we are in no rush. We will wait to see if the SPX can breakout above 1440 and then decide what to do.
I am away next week on a short break but will be checking the markets every day.....just in case.
Until next time.
Economic news was abundant Thursday with most the data showing weakness. There were two regional manufacturing reports in the form of the Philly Fed survey and the Empire State Mfg. survey. Both reports showed contraction with the Philadelphia region seeing its index remain in negative territory at -15.6. This was slightly better than anticipated, but shows that sluggishness remains. This was further supported by the industrial production report, which showed a decline of -0.7 percent, 4-tenths worse than expected. In the past year, industrial production is up 0.2 percent, which is well below the 1.4 percent gain seen in the prior month.
The housing market index continued to show weakness, falling one point to 19 in May. The low for this index came in December at 18, but was trading at 33 one year ago. Buyer traffic was weak, falling two points to 17, a sign that the bottom for housing isn’t here yet. Housing starts are due out tomorrow and are expected to show an annualized rate of 940,000 units.
For the most part, the major market indices remain below resistance at their respective 200-day moving averages. It will be interesting to see how stocks fare to end the week and if the bulls can finally find the strength to push through the resistance.
As for what we will do going forward, well the June expiration cycle is five weeks.....a long time so we are in no rush. We will wait to see if the SPX can breakout above 1440 and then decide what to do.
I am away next week on a short break but will be checking the markets every day.....just in case.
Until next time.
# posted by Paul @ 4:42 AM 
