Stocks Surge Ahead Of New Home Sales...

FUNDAMENTAL ANALYSIS
Stocks staged a followup today ahead of tomorrow's New Home Sales data (see economic calendar) with the Dow gaining 114.7 points, posting the BIGGEST 3 days rise since November! After Monday's existing home sales beat expectations, investors are looking ahead for tomorrow's New Home Sales to beat expectations as well, indicating that the housing market is coming to a bottom at last. In fact, this rally came even though the Producer Price Index was higher than expected! A little bit of exuberance? Maybe, but let's not forget that the stock market DOES NOT reflect current data! The stock market reflects FUTURE EXPECTATIONS and the expectation clearly is that the housing mess is coming to an end.

TECHNICAL ANALYSIS
A follow up to yesterday's breakout but what's missing? V-O-L-U-M-E!!!! Clearly many investors are still on the sidelines and waiting.... waiting for what? Is there something most of us don't already know? Maybe. No matter what, the immediate short term resistance level is at 12750 which the Dow failed at during the last relieve rally in January. I still cannot give my 100% certain stamp of approval on this "rally"... its just not not showing all the indications needed.