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Two Ways: Consumers Get Happy; Market Follows


Strengthen your portfolio in good times and bad.


Though US equity markets opened lower today on geopolitical tensions from North Korea, the open marked the low for the day, as stocks immediately began to rally on better-than-expected consumer confidence numbers, surprising many economists.

According to Bloomberg, the Conference Board's sentiment index surged to 54.9 in May, with April figures revised from 39.2 to 40.8. It was the largest such gain in 6 years, stimulating speculation that the economy is indeed on a path to recovery.

The Conference Board said the index is now at 7-month highs; looking forward over the next 6 months, expectations for economic activity soared to 72.3, from 51.0 in April. Altogether, the 28-point rally in confidence through April and May is the largest since records began in 1967. This contrasts its performance in February, when the index reached its lowest point on record with a reading of 25.3.

For more context on the markets, see Op Ed: The Earnings Revision Circus.

From the Bull Pen: We saw another convincing bid in the trannies after another test of support. Bulls can use the ETF (IYT); a sell stop can be set below the day's low which also coincides with the 50 day moving average ($53.40).

From the Bear Cave: As for downside plays, Professor Dispennette offered M&T Bank (MTB) on the Buzz today. One can enter a position in the $49-51 range, with a buy stop above $53 His target is $30.

It's good to be back, Minyans. Have a great night!

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No positions in stocks mentioned.

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