Tuesday, March 16, 2010
The benchmark S&P 500 index jumped to a fresh 17-month high after the Federal Reserve decided to hold rates steady and pledged to keep rates low as the economy continues to improve. Compared to the prior session, volume rose on the NYSE and Nasdaq exchange which was a welcomed sign. Advancers led decliners by a wide margin on both exchanges which was another healthy sign. There were 54 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, up from the 43 issues that appeared on the prior session. New 52-week highs again overwhelmingly trumped new lows on both exchanges.
Economic Data: Housing Starts Top Estimates
Housing starts topped estimates last month month which was a sign that the ailing housing market may be improving. The government also announced plans to institute a new law in the way short sales are handled. Bankers must now give guidelines on what an acceptable offer is for a short sale to help expeditate the process. In addition, the banker must provide an answer within two weeks of a proposed offer which is a big improved to their normal lag time of 3-6 months.
Fed Holds Rates Steady as Economy Improves:
The Federal Reserve on Tuesday reiterated its pledge to hold interest rates at record lows to help stimulate the economy and ease high unemployment. The Fed was more upbeat than expected which was a welcomed sign for Wall Street.
Market Action- Confirmed Rally:
Looking at the market, since the March 1, follow-through-day (FTD) the market and a batch of leading stocks steadily rallied. The fact that we have not seen any serious distribution days since the FTD bodes well for this nascent rally. It is also a welcome sign to see the market continue to improve as investors digest the latest round of stronger than expected economic and earnings data. Remember that now that a new rally has been confirmed, the window is open to start buying high quality breakouts. Trade accordingly.
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