Tuesday, April 24, 2007

DJIA Surging to Another All-Time High, Led by the Tech Sector

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Semi longs, Computer longs and Commodity shorts. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly negative as the advance/decline line is mildly lower, sector performance is mixed and volume is above-average. Sentiment in the Northern part of the country continues to dramatically skew overall consumer confidence readings. Once again, the overall decline this month was led by a -10.0% drop in the Northeast Central and -13.4% decline in the New England region. Confidence in the Mid-Atlantic region actually rose 5.1% this month. What is truly amazing is that confidence in the Northeast Central region is now at 59.0, a very depressed level that has only been eclipsed during February and March 2003 when it came in at 58.20 and 58.50, respectively. This also happened to be right around the time of the final test of the major bear market lows during the second week of March 2003. It is also interesting to note that housing is arguably the least problematic in the northern part of the country. I continue to believe the fact that most media outlets and investment funds are based in the northern part of the country is helping to pump air into the current U.S. "negativity bubble."

Here is a breakdown of consumer confidence by region:

  • Northeast Central 59.0
  • New England 80.10
  • Mid-Atlantic 97.0
  • Northwest Central 99.40
  • Southeast Central 116.40
  • South Atlantic 115.50
  • Pacific 116.80
  • Mountain 135.70
  • Southwest Central 124.0
I expect US stocks to trade mixed-to-higher into the close on positive earnings reports, short-covering, lower energy prices and lower long-term rates.

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