A better than expect jobless claims figure helped boost stocks at the open. Claims fell to 421,000 and continuing claims fell to 4,086,000. Futures picked up some steam heading into the open providing a decent size gap. Volume exploded out of the gate, AIG helped with the NYSE volume to start, but the volume run rate tapered off as the day progressed. NASDAQ volume shot up and faded, but closed higher on the day as the market closed about the mid-point of the day. Near the close PIMCO raised its growth forecast for the market giving stocks a push at the close.
PIMCO’s upward revision of growth forecast should not come as a big surprise as earlier this year the dominate bond market player launched an equity shop. Higher growth for the United States will certainly increase inflationary pressures putting strain on the bond market. The firm will not want to lose its assets because they do not have an equity shop as money will flow from bonds to equities. It is hard to gauge whether or not the firm is talking its own book or do they really believe there will be higher growth. Speculation of this sort does not help us out one bit and why it is more important to view the action of the market. Tune out the noise, stick with the market action.
Equity put/call ratio finished at .45 today suggesting the need to accumulate call options. Sellers are getting mighty complacent at this point in the game. It would not surprise me to see sellers come in the market and knock us lower for a few days. We’ll need to avoid any signs of stalling and distribution. Today we avoided stalling action by ending the day higher than the mid-point of the session. Any heavy volume selling, especially if accompanied by big percentage declines would be action that would give us pause. For now, we remain in an uptrend.
Use your stocks as your guide and ignore what you hear from CNBC and other financial news outlets.
