MARKET WRAP – THE INCREDIBLE WINNING STREAK CONTINUES

St. Patrick’s Day proved to be a lucky one for the bulls.  Stocks closed higher on the day by 0.55% as the incredible winning streak continued across the board.   Stocks were up almost 1% at mid-day before reversing dramatically.  The action had many of the characteristics of a panic bottom – an excessive rush that actually took stocks up over 0.5% in just a few minutes.  Stocks stabilized in the final hour after nearly going into the red.  By the close of trading the winning streak was intact.

Several remarkable streaks continued on the day.  Bank stocks have now rallied in 13 of the last 14 sessions while the Russell 2000 has rallied in 11 of the last 13 sessions.  Most impressive has been the rally in the SPY which is now up in 14 straight sessions. I don’t make a living playing blackjack, but even I know that after 14 straight face cards it’s generally unwise to continue playing that deck….Investors and gamblers are notorious for pressing their luck, however.

Volume was very weak again today, but as Bob Pisani at CNBC said, “it just doesn’t matter!!!”.  Breadth was strong at 2.2:1.  The VIX was off almost 5% on the day and is now sitting at near identical levels to where the market dramatically reversed in January.

From Daily Futures:

U.S. Economy
The U.S. Labor Department said that producer prices were down .6% in February and up 4.4% from a year ago. It was the largest monthly decline in seven months. The June U.S. T-bonds were up 8/32nds at 117.29/32nds.

The Mortgage Bankers AssociationÕs index of mortgage applications was down 1.9% last week. The average rate on a 30-year fixed loan fell from 5.01% to 4.91%, the lowest since December.

Grains and Cotton
May corn closed up 7.25 cents at $3.74 with ongoing concerns that spring planting may be delayed due to excessively wet conditions in the U.S.

Cocoa
Yesterday, a couple of commercial chocolate producers said that the sell-off in cocoa prices was overdone (see article). Today, May cocoa closed up $57 at $2,905.

Sugar
Is the sell-off about done? May sugar spent most of the day lower, but closed up .09 at 18.33.

Energies
OPEC officials met and agreed to keep their production quotas unchanged, as expected. From their point of view, current oil prices are favorable so they don’t seem too concerned about members that are exceeding their quotas. May crude oil closed up $1.24 at $83.21.

The U.S. Department of Energy (DOE) said that crude oil supplies were up 1.0 million barrels last week to 344.0 million barrels. Supplies of gasoline were down 1.7 million barrels and heating oil supplies were down 1.4 million barrels.

The DOE also said that refinery use slipped from 80.7% to 80.6% of capacity last week. Over the past four weeks, gasoline demand was up 1.3% from a year ago and distillate demand was down 3.1% from a year ago.

Metals
The World Bank raised its estimate of GDP growth in China from 9.0% to 9.5% for 2010. May copper finished up 5.30 cents at $3.4180.

April gold closed up $1.70 at $1,124.20 after the Federal Reserve repeated again yesterday its commitment to keep the federal funds rate near zero.

Currencies
The U.K.’s Office for National Statistics said that the November-January unemployment rate was 7.8%, down from 7.9% a month ago. The number of unemployed fell by 33,000 to 2.45 million. The June British pound closed up .0097 at $1.5321.

Statistics Canada said that wholesale sales were up 3.0% in January to C$44.4 billion, the biggest monthly increase in three years. The June Canadian dollar closed up .57 at a new contract high of 99.12.

Eurostat said that construction output in the EU-27 was down 2.0% in January.

Japan’s Trade Ministry said that its tertiary index of services was up 2.9% in January, the first increase in three months.

. . . Cats and rats and elephants and sure as you’re born,
the loveliest of all is the unicorn.
Have a safe and Happy Saint Pat’s!