Stocks End Q1 Higher But Last Day Lower


Wednesday, March 31, 2010
Market Commentary:

The major averages ended lower on the last day of the first quarter. For the year and quarter, US equities rallied as investors looked past the Greek woes and remain optimistic about the economic recovery. Volume totals on the NYSE and on the Nasdaq exchange were reported higher compared to Tuesday’s session which marked a distribution day for both major exchanges. Decliners led advancers by an 11-to-8 ratio on the NYSE and by a 17-to-10 ratio on the Nasdaq exchange. There were only 16 high-ranked companies from the Leaders List that made a new 52-week high and appeared on the BreakOuts Page, lower than the 44 issues that appeared on the prior session. New 52-week highs outnumbered new lows on both exchanges yet again.

Economic Data: ADP Payrolls Report, Chicago PMI, & Factory Orders:

Before Wednesday’s opening bell, ADP, the country’s largest private payrolls company, said US employers slashed -23,000 jobs in March which fell short of the Street’s +40,000 estimate. Elsewhere, the Chicago PMI index grew to 58.8 but fell short of the Street’s more robust 61 forecast. A separate report showed that factory orders grew +0.6% as the economy continues to improve.

Market Action- Confirmed Rally:

The benchmark S&P 500 index currently has 4 distribution days while the Nasdaq composite and Dow Jones Industrial Average have 3, since the March 1, 2010 follow-though-day (FTD). Normally, it is considered healthy for the major averages to have less than 4 distribution days in a four week period. 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 proactively be buying high quality breakouts meeting the investment system guidelines. Trade accordingly.

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