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The stock market in most cases remained right on or into new highs for the year into the US Thursday morning trade. Apparently the stock market was able to spin the US scheduled data yesterday into a positive, despite the fact that the headline readings didn’t seem to show positive progression. Even more surprising, is the fact that the market doesn’t seem to be discouraged by a missed November same store sales forecast from discounter Costco, perhaps because the Costco figures were still above prior figures. However, the market might be seeing some positive lift from the financial sector, which saw signs that Bank of America was poised to pay back their government funds. Perhaps the stock market is being lifted by favorable economic views from a series of Fed members overnight and perhaps the market is generally being cheered by the fact that 8 of 12 Fed districts showed the prospect of improvement in the Fed Beige Book release yesterday afternoon. Therefore, the bull camp looks to retain control over the near term trend unless the initial claims posts a larger than expected decline in its weekly readings later this morning. We are somewhat surprised that the talk of an exit strategy for portions of the historical easing effort hasn’t caused some concern in the marketplace, perhaps because a large portion of the trade thinks it is still premature to consider exiting the ultra easing posture. Therefore, the trend looks to remain up today unless there is a headline development that derails bullish sentiment.
S&P 500: As suggested already, the December S&P has managed a fresh new high for the move in the early going today and that would seem to embolden the bull camp. However, the market will be presented with a series of potentially critical initial and ongoing claims figures, which are made even more important by the close proximity of the monthly payroll report on Friday. As in the rest of the equity markets, we have to leave the edge with the bull camp until there is a definitively negative shift in the macro economic wind. The outlook for the economy isn’t overly impressive, but the trade has recently spun the data in favor of the bull camp. Near term critical support in the December S&P is seen at 1111.40 and then again down at 1108.40 but at least into the opening today, the bull camp looks to retain control over prices.
DOW: While the December Mini Dow hasn’t made a fresh new high for the move this morning like the S&P, it does sit within relatively close proximity to its 2009 highs. Apparently the blue chip stocks are cheered by the news that another major financial player is planning to pay back its bailout funds. With the top of the up trend channel sitting at 10,507 today, it might not take much upside action to result in yet another upside breakout on the charts. In our opinion, the path of least resistance in the Mini Dow is pointing upward, unless the December contract fails to hold above 10,461 in the early action today.
NASDAQ: The December Nasdaq continues to lag behind the rest of the market, with prices still sitting well below the mid November highs. In fact, it would seem like the December Nasdaq is content to waffle around both sides of the 1800 level until some more definitive news is seen on the status of the US economy. We have to think that the path of least resistance is pointing weakly to the upside and that the Nasdaq will probably follow in the footsteps of larger cap stocks over the coming two trading sessions. A critical support point is seen at 1792 today and as long as that level holds in the early going today, we will leave the edge with the bull camp.
TODAY’S MARKET IDEAS: A minimally bullish bias remains in place this morning but the market might need some help from the US numbers to extend the early gains.
