Stocks broke above their 200 day moving average with conviction on Tuesday.
On Wednesday they gave back a little early in the session before rallying into a breakeven close…and the 2nd close above the 200 day.
Thursday is a near repeat of Wednesdays action with heavy selling early on followed by a massive rally into slightly positive territory. That makes 3 in breakout territory.
That’s the technical picture. On the fundamental front take your pick of:
- ISM Manufacturing showing expansion
- ISM Services showing expansion
- ADP showing a WHOPPING 325K jobs added in December
- Jobless claims under 400K again and again.
- Q4 GDP estimates of 3.5 to 4% are quite common
- Less negative headlines out of Europe (or at least we are becoming immune to them)
- Improvement in Chinese economic #s (they ain’t dead yet)
- All of the above
I will go on record as a firm believer in this breakout for stocks. The speed and final destination are a mystery, but up is the direction for now.
Where do you stand on this important topic? Share your comments below with the Zacks community.
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