Stock Market Analysis

Wednesday, April 27, 2011

Watch on Deck, Bulls Have the Ship!

The Dow rallied 115 points today as the market celebrates a slew of better than expected economic data.

Fundamentals
Market received a much needed boost today from better than expected Easter retail sales and Consumer Confidence. Both Store sales and Redbook reflects much better sales over the Easter period before market opened resulting in a strong opening which saw some profit taking. However, the bulls really took charge after the much better than expected Consumer Confidence data was released at 10am. Indeed, in an economy driven by consumers, these numbers really drive home a message; that consumers are still willing and able to spend. Just the message investors need to jump in on. However, the surge in sales is really just a seasonal one and with the current short term trend of deterioration in economic data, we might see some volatility and profit taking over the next few days as other economic data are released.

Technicals
A strong breakout candle with strong volume was created today, the kind that is needed to jump start a new leg for a new high. However, I would expect the market to move sideways for a few days following such a strong breakout. All in all, it is clear that the bulls are in charge and the market has returned to a general all out bull trend. Lets enjoy the ride!

For now, the Dow remains in short term bull trend, intermediate term bull trend within a primary bull trend.
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