Thursday, March 15, 2012

Market Madness Daily Market Update - 3/15/12

Index Chart Updates and Analysis for March, 15 2012

S&P 500 Tops 1,400 On Economic Reports
U.S. stocks advanced, sending the Standard & Poor’s 500 Index above 1,400 for the first time in almost four years, as data showed manufacturing in the New York region unexpectedly increased and jobless claims declined.
Macro news continues to follow the market upward. The market has led the news this entire rally and the increasingly positive macro measurements are putting the bear case in serious doubt. That is, of course, if the numbers can be trusted and are not just being manipulated or propped up by expansionary policies. At Market Madness we don't consider that possibility to be all that far fetched, however.

Most major indices finished at or near their highs of the day for gains of around 0.5% With the small cap Russell 2000 index outperforming on a gain just under 1%. The VIX was basically flat for the day creeping up from 15.31 to 15.42 for .11, 0.72% rise.

The S&P 500 index (SPX) finished right at its highs of the day with a gain of 8.32 (0.60%) points to 1402.6
With another strong day for buyers this market continues to impress (and sometimes baffle). Technicals also further improved with MACD gaining some steam and a return to a declining SPX : RUT ratio. The "projected" lines on the chart below represent nothing more than a "most probable" outcome based on purely technical analysis and, without further supporting evidence, should be given little more weight than any other guess.

Semiconductors had a great day today with a 2% gain for the SOX index. We noted in our weekly market update of 3/2/12 that this it was approaching an important support level to the downside and to look for a bounce off that level (at 400). After that actually did come to pass we then voiced the view in our daily market update for 3/7/12 that this index could run faster, and farther than other indices on continuing market strength. It may now be approaching some overhead resistance around the 440 level and more caution is prudent for now until we see how price interacts with that level.

The RUT outperformed its peers today with a gain of 8 points for 0.98% to close out the day at 831.46. After this day of respectable gains for the RUT it is now right back up against that channel support. And once again it is clearing this level that is, and has been, the major hurdle for this index. This will be a chart to watch tomorrow. If it can finally break that barrier this index should be best positioned for relative outperformance in an environment of overall market strength.

As always Good Luck and Stay Safe!

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