Thursday, May 12, 2011
Stock Market Commentary:
Stocks and a host of commodities stopped falling after the latest round of economic data was released. Oil, silver, gold, and a host of other closely followed commodities fell after a brief rebound from last week’s week-long “Flash Crash.” From our vantage point, the market rally remains under pressure due to the lackluster action in the major averages and several leading stocks.
Producer Prices & Retail Sales Miss Estimates, Jobless Claims Fall
Before Thursday’s open, a slew of economic data was released. Producer prices rose 0.8% which topped the 0.6% estimate. Elsewhere, retail sales rose +0.5% which was just shy of the +0.6% estimate and suggests consumers are still having a tough time dealing with surging fuel prices. The Labor Department said jobless claimsslid by –44,000 last week to 434,000. Even though jobless claims fell for the week, the four-week average rose +4,000 to 436,750 which is not ideal.
Market Outlook- Rally Under Pressure
From our point of view, the market rally is under pressure which suggests caution is paramount at this stage. Looking forward, the next level of support for the major averages are their respective 50 DMA lines and resistance is their 2011 highs. The rally remains in tact as long as support holds. If you are looking for specific help navigating this market, please contact us for more information.