The bulls took charge during the first trading day of the year, and all major indexes gained nicely finishing at their highest levels in 15 months.
Supporting the rally were comments from Fed officials this weekend that the easy-money policy will be with us for a while longer.
Another positive came from the first economic report of the year when the manufacturing reading posted 55.9 in December, which was up from 53.6 in November. Readings above 50 simply show that more manufacturing companies are saying that business was improving than saying it was worsening.
Still, we have to wait and see if this was a one-day wonder or the beginning of further upside moves. Let’s remember that the first trading day of 2009 started with a 259 point rally in the Dow, after which the markets fell apart and the Dow ended up losing 8.8% for the month.
The most important report of the week will be on Friday, when December jobs are on the menu. Economists, who can be way off at times, expect payrolls to fall by only 1,000 with the jobless rate ticking up to 10.1% in December from 10% in November.
Any numbers showing worse conditions than expected will very likely pull the rug out from under this rally.
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