On Thursday better than average home data propelled the S&P index to its biggest rally in almost three months as the S&P topped 1400 intraday and closed just below the magic number.
The positive factor cited was the fact that the US housing market had more deals in March than expected. Combine that with the Fed’s upbeat report and you have the perfect storm for a rally that seems to be finding new legs.
Unlike the previous two weeks in which even good news was viewed with suspicion, any negative news is now discounted. The day had started with jobless claims higher than expected and earnings on some major companies including UPS coming in below expectations, but when the housing numbers hit the market all of the negative news was quickly forgotten.
Earnings season has proven to be better than expected. Among the big winners on Thursday was the Pulte Group Inc. homebuilder which saw its stock move 10% higher on less than expected losses.
Investors have been watching earnings data closely and more than three quarters of the reporting S&P companies have hit their targets in the past two weeks. Per share profits have grown 3.3 percent for the first quarter and that is way above the less than 1% that the street expected.
Fear seems to have completely vanished from the market as the VIX index fell to near yearly lows.
Right now the world is completely safe. Perfection is built in and there is nowhere to go but up. How quickly this can change and suddenly the news that is bullish will become bearish.
Reacting to markets is crucial and that is what I can teach you to do. All market phases present opportunities and this market will be no different.
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As Always,
Keep those stops tight.
Todd “Bubba” Horwitz
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