It Sure Feels Like a Breakout
Stocks have been consolidating around the old highs of 1370 for the better part of the last three weeks. On Tuesday they broke out to a post Great Recession high of 1396.
What was the catalyst?
First, we had solid economic reports out of Europe saying things might not be so bad over there. Next we got a robust Retail Sales report for February. This had shares pushing higher early in the session.
The cherry on top was the FOMC Meeting announcement where they Fed reiterated everything they have said in the past. And simply there is no need for more QE.
In past months, this lack of additional QE disappointed traders. This time around they understood it to mean that the US economy is improving enough that no more action is needed. Clearly, that is a very positive thing and reason to sprint to a new high.
Give yourself a big pat on the back if you have been riding this bull rally to new heights. And give yourself a big punch in the face, if you’ve been on the sidelines letting these hefty profits slip on by.
Best,
Steve Reitmeister (aka Reity… pronounced “Righty”)
Executive VP, Zacks Investment Research
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