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Jonathan Yates
Market Rebounds from Bank of Japan Move After Weak Data Drags Dow Down by Triple Digits

Despite disappointing economic news from both the United States and unrest with North Korea, all three major stock indices rose in moderate trading today.  Once again, monetary policy announcements from a major economy was responsible for revitalizing the liquidity induced bull market for global bourses. The Dow Jones Industrial Average closed up 55.76, with the Standard & Poor’s 500 rising 6.29 and the NASDAQ up 6.38.  All have been moving into record territory with the first quarter of 2013 the best on record.

There were plenty of bullish signs.  Gainers outpaced stocks declining by 3921 to 2123.  There were 202 stocks hitting new highs with 105 bottoming out at new lows.  At the closing bell, bullish sentiment was at 57% with bearish feelings registering at 43%.

There are concerns about how strong earnings will be with the season fast approaching.  The Dow was down in triple digits yesterday on those fears.  But aggressive new stimulus measures from the Bank of Japan lifted stocks across the board.  These efforts will lower the value of the Yen, which will boost Japanese exports.  Moves such as these are needed as Carl Weinberg, Chief Economist for High Frequency Economics, stated in an interview with Barron’s this weekend that Europe was in a depression and Japan was approaching such as economic state.

As the chart below shows, both the Dow Jones Industrial Average and the Standard & Poor’s 500 Index have been steadily rising on central bank actions, overcoming concerns about The Fiscal Cliff and other budget woes in the United States


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