Dow Finishes Higher by Triple Digits ...
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Mar
26
Jonathan Yates
Dow Finishes Higher by Triple Digits with Consumer Confidence Falling
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Closing higher by triple digits, the Dow Jones Industrial Average continues to move beyond the latest chapter of the European debt crisis…or so investors hope.  According to Steve Forbes, publisher of Forbes magazine, Cyprus isn’t over,”it’s a disaster for all of us.  The idea’s out there now that in a crisis politicians won’t hesitate to seize any asset they can put their hands on.  It just guarantees more fear for the future.”

Regardless of any trepidation about the future, the candlestick patterns for the Dow were bullish, with elongated positive bodies rising from about 2:45 pm to just before closing, when a flurry of profit taking ended the day on a negative note at 14559.65.  The Standard & Poor’s 500 Index was up 12.08 points, 0.78%. to finish at 1563.77.  Also bullish was the 525 companies hitting new highs on The Big Board with only 52 bottoming out at a new low.  Advancing shares, 4001, almost doubled the 2104 that declined today.  The exchange traded fund for the Dow Jones Industrial Average (NYSE: DIA) and the Standard & Poor’s 500 Index (NYSE: SPY) are both trading above each’s 20-day, 50-day, and 200-day moving averages with a short float of 13.06% for the DIA and one of 31.55% for the SPY (a short float of 5% is considered to be troubling).

More good news was durable order growth rising by 5.7%.  Excluding transportation orders, however, durable goods dropped by 0.5%.  Also falling and of far greater concern was the Conference Board’s consumer index, down to 59.7 in March from 68 in February.   Never a good sign for the equity markets, though, gold broke through the 1600 barrier, up $2.80 t o 1600.40.

That contradicts the strong new home sales in February of 411, 000 units, however.  While the number fell for the units sold, prices rose.  For the last month, the exchange traded fund for home builders, SPDR S&P Home Builders (NYSE: XHB) is up by 11.17%.  The last year of market action has witnessed a 41.92% surge in the XHB.

The most bullish positive for the American economy is that the Chinese are bullish on The Greenback again. In January, the Chinese added $51.3 billion to their dollar holdings.  That beat the previous record for a single month’s purchase of $36.9 billion from May 2008.  This could be the start of an offensive by Beijing in a currency war to keep the US Dollar high and the Yuan from rising, but anything that helps keep interest rates low is a big up for the American economy and global financial markets.

 



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