Markets Hit New 2010 High

Major U.S. market indexes climbed to new 2010 highs last week reaching levels not seen since before the financial collapse that started in the fall of 2008. Last week marked the fourth straight weekly gain for equities as we approach the end of the first quarter.

Boosted by the House of Representative’s passage of a highly controversial health care reform bill, the Dow Jones Industrial Average began the week with a 43 point advance. By the close on Friday the Dow had gained over 108 points, ending the session at 10,836.

Helping to sustain the positive tone were Thursday’s weekly jobless claims which fell for the fourth week in a row, and Fed Chairman Ben Bernanke reiteration of the need for an extended period of record-low interest rates. The Dow soared to 10,955 intraday, but gave back much of the gain in late trading, eeking out a meager increase of 5 points. Friday’s action was similar as traders, once again, pushed the Dow over 10,900 after a deal was announced to rescue Greece from its debt crisis, but could only muster a  5 point improvement by the close of business.

Short-term momentum favors a bullish stance but overhead resistence levels may prove to be difficult to break through. The week ahead could be boosted by institutional “window dressing” as money managers buy the best-performing stocks and sell the under-performers as they prepare for end of the quarter reporting. Coupled with the fact that April historically delivers the best monthly returns of the year and that bearish sentiment has recently overtaken the bulls (generally a bullish indicator), there is reason for near-term optimism.

Conversely, the historically high premium of the CBOE Volatility Index (VIX) relative to the S&P 500 (SPX) indicates there could be rough seas ahead. The late session pullback on Thursday and Friday are symptomatic of a market struggling to break through resistence. If a reversal were to develop, it would be not be expected until after Wednesday’s end of quarter close with potential support  at 10,750 for the Dow and 1,150 for the S&P 500. 

Our managed accounts continue to shine with the hedged portfolio climbing to $1,609,657 and the unhedged account advancing to $1,895,232.

Keep in mind, both of these accounts started with $1,000,000 less than one year ago. Visit us at http://optionsprofitzone.com to learn the secrets of professional traders that have helped us achieve these extraordinary returns.

Stay informed by following First Wealth, your financial education publication.
Michael

Advertisements

Tags: , , , , , , , , ,

One Response to “Markets Hit New 2010 High”

  1. Taking Stock of Wall Street 2008-10-13 Says:

    […] A New High for 2010 « First Wealth Financial Education […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: