Ahead of the open, (16-03)
Friday, March 16, 2012 at 06:57AM Takeaways from today’s first SP >1400 close in over 4 years is all the ‘good’ little things that took place from the technicals in equities to economic data to asset classes. For good measure, throw in all the fact all the right equity groups led the way.
Firstly, the small caps outperformed with the RUT closing at potential break out levels ~832/833 coinciding with the SP 1400. More importantly, the Dow Transports that had Dow ’sell’ theorists all excited since early February due to IYT not confirming DJIA bull market highs had a 3.3% burst on top of already breaking through the Feb down trendline earlier in the week. As of close, it was back at Feb. resistance 6 weeks later! Amazingly, last time RUT/IYT shared these highs together, SP was ~70 or so handles lower.
Secondly, tier2 eco’ data noted yesterday didn’t disappoint at all as Jobless claims came in with another cycle low and the first March data of regional FED manufacturing was better than expectations keeping the economic dream intact. Inside the surveys was less exciting, so call it a wash as ‘better than expected’ really wasn’t expected after months of gains.
Thirdly, the fear factor of the explosive 2- day run in 10yr Treasury took a break as the TSY finished pretty flat. Also, less important, but Gold seemed to stabilize as well after the 2- day sell off as well.
If it wasn’t for the fact the market is so extended, the above would be plenty of reasons for Bears to tell it’s cubs they won’t be eating for a while longer.