Thursday’s market recap: Another great day! Even though it could not hold on to it at close, Dow breached 8000 mark for the first time since Febrauary 9. Nasdaq is now positive for the year! S&P somehow managed to hold above the critical 833 support level.
The Dow gained 216 or 2.8%, to close at 7978. It had earlier gained as much as 314 points. The S&P index gained 23 points or 2.9%, to end the day at 834. The Nasdaq rose 51 points or 3.3% to close at 1603.
Crude rose $4.25 to settle at $52.64 a barrel, while gold fell $18.80 to $908.90 an ounce.
Traders were in buying mood. Markets opened up nicely in the morning despite some negative data on jobless claims. There were again small doses of good data that helped. Banking sector had a some relief with FASB’s decision to relax mark to market rule on toxic assets. Markets also liked the news coming out of G-20 meeting in London of heads of states. G-20 leaders decided to fund IMF over $1 trillion to help troubled nations around the world, and also agreed to formulate stricter global regulation of financial institutions. ECB lowered interest rate by 0.25%, to bring the rate down to 1.25%. Factory orders posted a larger increase in February. This news came on the heels of yesterday’s better than expected data on pending home sales, manufacturing activity and auto sales.
TaurusTrader’s swing portfolio had a nice day. All 4 of yesterday’s picks – EXP, WDC, HSP, and TNA, were bought, and had decent gains.
Focus list for Friday, April 3: There are signs to support that this rally may have more ‘juice’ left in the tank to run. As I said in my earlier posts, small doses of good news have started coming in indicating that this recession has started to recede. Benefits from innovative plans, at least some, put forth by the new administration appear to slowly seeping in to the economy. CNBC’s Bob Pisani observed that mutual funds are getting back to the market to scoop up stocks. Commodity prices are going up. Copper just made a new 5-month high. Copper is a good indicator of economic growth. Similarly the transportation index, which went on a tear today! I also expect that the Banking stocks to continue their momentum following the boost they got from Thursday’s favorable mark to market ruling by FASB. RIMM reported exceptional quarter after Thursday’s close, and was up over 20% in aftermarket hours. Folks, these are some good signs ….
However, we can’t let our guard down. The optimism could be easily crushed if tomorrow’s jobs report surprise us with lousier than lousy expected data. Economists predict a loss of 654 K jobs in March, and unemployment rate to rise to 8.5%, from 8.1% in February.
TaurusTrader swing portfolio picks for tomorrow, Friday April 3 are:
- FMX – Buy above $27.08, stop at $24.90, target $30.60
- BCE – Buy above $21.77, stop at $19.90, target $24.50
- WFC – Buy above $16.26, stop at $14.90, target $19.00
There are no day trade picks for Friday.
Please follow all trades with protective stops. The markets may be kind to you, but it can turn against you any time unexpectedly!
Good luck trading.