subject: Stock Charts Pt1 [print this page] Daily Stock Report for Tuesday Morning, November 24, 2009 pt1
The stock market started up with a big move today after investors reacted with enthusiasm when the existing home sales were released this morning.
The Dow30 moved up today 1.3% to a higher high which is an important event. The 1.4% increase in the Nasdaq Composite and S&P-500 today (Monday) was not a higher high but the S&P 500 is close.
First time buyers took advantage of the special tax credit which boosted October sales with the biggest surge in 10 years. What is illogical is this is a temporary increase in demand as the tax credit was scheduled to expire in October 2009 but was delayed by Congress until Spring 2010. But whoever questions the logic of an emotional 12 year old girl.
On Wednesday morning the data on new home sales and weekly mortgage applications which will also likely to be higher than expectations but although it is nice to see the market respond in such a bullish manner, it isnt clear whether this is a one-time benefit or the market will continue to move higher and not have a pullback as I expected. It is a little premature to say yet if todays action is the resumption of the bull run we had or just a one day wonder.
The more important likely scenario is the market will turn its attention to this Fridays shopping statistics and the forecasts are that the consumer will act more like Scrooges rather than Santa Claus. That is really the longer term focus is the state of the consumer than the tax credit for first time home buyers pushing up existing home sales.
REPEAT from last report: The week of Thanksgiving usually has a bullish bias to the market as many traders are taking the holiday week off. The day after Thanksgiving, known as Black Friday will give us some indication of retail sales and an indication of what the Holiday sales will be. This year in particular, the market analysts will be using this as an important indication of the state of the consumer, which is the biggest driver of the market. NOTE: This Friday is half day trading and closes at 1pm Eastern time (ET).
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