The market is sending mixed signals once again. On one side of the ledger, the technical picture looks encouraging. The indexes all held at support levels as sellers attempted to bust stocks out to the down side.
All of Top Equity News’ market gauges are still hinting at more upside, and the economic news is slightly off target, but still shows signs of an improving economy. Additionally, the bullish case is aided by the Federal Reserve low interest rate policy that gives investors few options beyond the stock market. Another round of quantitative easing and you’ll have a fatter digital money pig moving through the market python.
On the cons side of the ledger, first quarter earnings are expected to be as dull as my son’s 9 month-old black leather school shoes. Wall Street sees only minor year-or-year growth of less than 1% for the first quarter of 2012. Six of the 10 S&P sectors are actually believed to have regressed.
Ugly sector charts join earnings as potential disappointment. In TEN’s sector selector review, nearly 4 times as many charts showed up in the sell lists than the buy list, with only a handful emerging as definitive buy patterns. That’s the worst we have seen in a long time.
Earnings don’t kick into full gear until your taxes are due. In the meantime, a couple of major economic reports are slated for the week ahead. It all kicks off this morning at 10 am eastern when the Institute for Supply Management Manufacturing Survey(ISM) is released.
It’s important because the report measures the health of the manufacturing sector on many levels. The rule of thumb is a reading of more than 50 means the economy is expanding, under 50 means contraction and a possible recession. Today, Wall Street believes the survey results will produce a score of 53, up a bit from last month’s 52.4.
Before the Market opens on Friday, the market will have to deal with the most watched economic report of all, the Employment Situation. It’s the announcement when we find out how many people got jobs and what the unemployment rate is.
Last Monday, Ben Bernanke may have dropped hints that Friday’s report could be underwhelming. At the same time, some brokers estimate that March’s numbers will need to be “adjusted” down as many as 100,000 due to the unseasonably warm weather.
The expectation is that the unemployment rate will remain the same at 8.3 (yeah right) and 201,000 new jobs created. TEN feels that Bernanke’s warning flares put both projections in doubt.
With a slow earnings week, economic news will continue to be the driving force behind program trading. If the headlines are positive, stocks are likely to add to their gains. A batch of blah news, and the indexes could test support once again.
Stock Market Trends: Economic Report to Clear Up Confusion is an article from: 
