Consumer Confidence Returning?

The Dow surged 196 points today as the consumer confidence number beat estimates by a mile (see stock market calendar). All major indices climbed steeply from 10am onwards right after the number was released. Yes, this is the biggest rebound in consumer confidence since this crisis begun and a decisive rebound at this point really does suggest a bottom to this economic crisis. So, is consumer confidence returning for real? Are people spending again? Well, traditional economics suggest that jobs need to pick up first before spending does. Jobs are still very much in the ditch right now but hey, the stock market is forward looking; Obviously investors are pricing all that in right now.

So, did anything change for the Dow today? Really, Nothing. The Dow was once again stopped short at the 8500 level in a continuation of the short term neutral trend. Today's surge did nothing to change that trend and did nothing to beat the 8500 resistance level. Relative strength continues to weaken as average trading volume continues to decline. However, a rebound off the 30DMA is always a good sign. At least we know that this short term neutral trend is not about to turn around into a short term bear trend to end the current intermediate bull trend yet. That is the only positive today. With the weakening in the technical indicators despite a gain today, the Dow just isn't displaying the kind of strength needed for a breakout yet. For now, the Dow continues to be in a short term neutral trend, intermediate bull trend and a primary bear trend.

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