..It (eco'data) does matter!...

It’s not to so hard to understand where today’s ‘all day 2.5% rally' stemmed from…yep!..all day, as in a rally with a good open and a good close,  not one the gives up gains late into the close as Tuesday and last Friday.

We headed into the week bolding.…“This week is the important data.. a few ISM's May data starting Tuesday), China PMI`s, auto sales, retail updates, NFP#!.  Weakness will likely mean a step back in all respects for the market.”… Yesterday…after a miserable close…  "..but US ISM was “bullish”  for production in months ahead and was firing on all cylinders in May.   This ISM # should have eased slowing growth concerns for more than a few hours!.   Maybe it will (it should if #'s like this) once the comatose investor switches focus from all the shenanigans encountered in May.     Well, maybe today the comatose investor stared to wake up on the heels of the neglected strong ISM reading.   Follow through on eco’ data started with an upbeat pending home sales # and the afternoon,  SAAR auto #’s came in much stronger than anticipated as well.    The importance of this weeks data is it shows what was happening while the European shenanigans were going on in May, so far,  it shows US economy didn’t blink an eye to all the turmoil and possible effects across the pond.

So, a few down #‘s and a couple more to go this week starting with retail tomorrow.   In our view,  a weak retail and a very strong NFP# is the expectation now and may not be as important as what we already got this week.   It should be enough at this point to rally further into Friday post NFP#).  How far we get by post NFP# will depend how far we can push coming now to the critical 200ma (~1105) as the market does a re-test of a previous rally from 1040.  (Note..a catalyst not getting much noise today is very important and that is from an overseas overhang on markets.  Spanish regional banks were able to reach a deal on merger terms after talks for a few weeks and won’t have gov’t seizures as had already occurred earlier).  So, if Europe happy and U.S stay happy, together we can push through all the technical resistance up to and over 1120 eventually.

Positives are this was move was broad sector based and the close was pretty, not ‘ugly’ as Tues/last Fri,. broke thru 2 ’R’ levels at 1083  & 1095 and thus, we’re bullish thinking SPX, >1120 to 1150 in the making for this leg.    A good aspect to the broad rally is the majority of our listed high beta stocks didn’t get out of hand today.   The gains were subtle given the 2.5% broad jump and give an oppy’ to get some popular beta names tomorrow or set ups ie. DGIT, a stock we added to our list that is similar biz to VCI here………(or even better on pullbacks if given)  that are not extended due to one day’s action.