Market Update: Market Rallies on Consumer Confidence

The markets rallied today fueled by the biggest jump in consumer confidence in six years.  Investors hoped that the steep and unexpected rise in consumer confidence was an indication of things to come with a slew of economic reports due out over the next couple of weeks.  However, mixed signals abound as house prices declined 18.7% (though at a slower rate than we saw in 2007).

The NASDAQ Composite jumped 3.5% and retook its 200 Day moving average while the other indices climbed about 2.5% all on heavier volume.  The true meaning of today’s action is the emotional reaction of investors in today’s markets.  With several more reports do out this week, including housing start, 1Q Gross Domestic Products and the fate of GM, the markets still have a lot of risk built in. 

Back to the charts.  We are still seeing bearish indications on the weekly-charts with a declining MACD.  On the short-term though the SPY (our S&P 500 benchmark) did retake its 20-day moving average, it continues to bounce in its range between about 88.60 and 93.00.  The indicators are giving us a long-term bearish and a range-bound short-term outlook.  (See the most recent weekly analysis.)

Photo © Copyright 2000, The Nasdaq Stock Market, Inc.
Reprinted with the permission of The Nasdaq Stock Market, Inc.
Photo credit: Peter Aaron/Esto

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