Wednesday, April 27, 2011
Stock Market Commentary:
Stocks were relatively quiet on Wednesday as investors digested a slew of economic and earnings data and the Fed’s first press conference. The market is back in a confirmed uptrend and remains healthy as long as all the major averages continue trading above their respective 50 DMA lines. The recent healthy action was in response to a series of stronger than expected Q1 results and a host of solid economic data. Now that the market is back in a confirmed rally, odds favor higher, not lower prices lie ahead.
Durable Goods Rise, Fed Meeting, & The Fed’s 1st Press Conference
Before Wednesday’s open, the Commerce Department said durable goods orders rose +2.5% for the third consecutive month as businesses continue to buy long-term equipment. As expected, the Federal Reserve decided to hold rates steady and reiterated their stance to keep rates near record lows to stimulate the economy. The Fed is not worried about inflation and said that any near term inflationary pressure is probably short-term in nature (i.e. temporary). After the Fed meeting, Ben Bernanke held his first, and historic, press conference which is designed to promote transparency and increase credibility to the public.
Market Outlook- Market In A Confirmed Rally
From our point of view, the market is back in “rally-mode” as all the major averages continue to trade above their respective 50 DMA lines and are flirting with, or at, fresh 2011 highs! In addition, leading stocks have held up very well even as the major averages slid below their respective 50 DMA lines in mid-April. If you are looking for specific help navigating this market, please contact us for more information.