(By Rich Bieglmeier) Thursday was another good day for stocks as sellers tried to take the market underwater, but buyers prevailed and the indexes finished well into the green. However, gains might be running towards the end of their rope, for now.
Just as the key benchmarks are difficult to bust on the way down, they are equally as tenacious on the way up. The NASDAQ is 15 points below its 50-day moving average. The Dow has another 200 ticks of headroom before butting up against its 50-day mark, and the S&P is only 7 points away from touching the key benchmark.
Looking back at the last 10-years for the S&P 500, when the indexes were trading below its 50-day average for at least a month, we could only find one case where the first attempt to break the technical trend-line was final. In other words, after bypassing the 50-day it stayed above the watermark for an extended period.
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With the NASDAQ and S&P within pillow-talk distance, it is likely investors see both challenge our findings. Don't be surprised to see the duo go past the 50-day line, only to back up afterwards. The good news is that usually the 2nd or 3rd pass is the last of trading below the key average.
The big news for today will be Personal Income & Outlays. Wall Street expects personal income to rise by 0.3% and spending by 0.1%. As usual, the most important side of this report is what people are doing with their wallets. Spending reports have been mixed in the last few announcements. As a result, we suspect today's number will hug expectations. With Jobless Claims running higher than expected, a downside surprise on income would not be unusual.
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Earnings season is slowing to a trickle. With slim picking, big surprises tend to standout more as there is less competition for the earnings' spotlight. Here, are this week's iEstimates.
|Smith & Wesson||SWHC||12/6/2012||$0.24||0.27||0.03||12.50%|