Analysis:
Yesterday's Analysis predicted that "the Initial Jobless Claims will be below 440,000, which, along with improving Leading Indicators, will drive the market higher." Today the Initial Jobless Claims came in 439,000, and the Leading Indicators increased 0.5%. The market recovered most of its losses from earlier this week, perhaps validating the conspiracy theory that Wall Street institutions were out there to take profits from late retail bulls and bought at bargains just when the latter threw in the towel.
Looking ahead to tomorrow, the Irish rescue will become more concrete, and Chairman Bernanke's speech will firmly reject the exaggerated concerns about uncontrolled inflation fueled by the Fed's QE2 and will reaffirm the Fed's commitment to carrying out the injection of the full $600 billion into the monetary system by next June. As a result, the market will rise to as high as 1,210.
Strategy:
Hold long at 1,197
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