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I On The Market - Thursday Update - 04/26/2012

 April 26, 2012 09:37 AM

(By Rich Bieglmeier) Apple Inc. (AAPL) did what iStock thought it would do, and its influence over the NASDAQ lifted the index back to its short-term moving averages. Despite the tech heavyweight's universal earnings' cheer; the NASDAQ's volume was skinny.

C'mon ladies and gentlemen of Wall Street, where is the conviction?

Maybe some of the starched shirt crowd's enthusiasm for everything but Apple was dampened by Wednesday's god-awful Durable Goods Orders report.

Ben Bernanke didn't exactly light things up either with his squishy remarks. However, the easy money junkies know QE3 is just a few more lackluster economic news reports away from a free digital money fix.

[Related -Automating Ourselves To Unemployment]

Investors will look for new catalysts now that AAPL and Ben have moved to the sidelines. The NASDAQ has established a new, lower edge trend line. The recent bottom marked the third consecutive lower low for the index, which followed two straight lower pivot highs. By most definitions, that's confirmation of a new downtrend.

In order for a new up move to take hold, traders will want to see the NASDAQ build on yesterday and close above 3050, and then close above 3075ish on the next push into the red. We want to see the walking downstairs pattern be replaced by stairs taking us to higher floors.

Whether that can happen in the face of weaker than expected economic news, and mild first quarter earnings growth, is a toss-up.

First quarter GDP numbers will be out before Friday's open. Prior to today's Durable Goods Orders report, iStock was highly confident that the economy would show at least 2.5% growth, which is the consensus.

[Related -Fed: Waiting For June… Or Godot?]

However, the "core durable orders report" of capital goods minus aircrafts missed badly. The expectation was for 1% growth; instead we were treated to a 0.8% dip.  Typically, this metric turns sour or sweet six to 12 months before the economy changes direction. The miss gives us pause.

If Friday's GDP shows that late in the first quarter the economy slowed like a NASCAR driver into the wall, stocks could be real vulnerable. All of a sudden, investor's focus will turn from yeah! look at all the bullish earnings beats to 3%-4% earnings growth ain't all that.

Don't be shy, let us know what you think in the comments below, and feel free to reach out to me at rich at wallsttools dot com.



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