Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

The Path of Least Resistance

Daily State of the Markets 
Thursday Morning - March 31, 2011

Publishing Note: Dave is traveling with his family this week but we've got you covered on the important news, happenings, and market-drivers in his absence.

Stocks continued their recent advance yesterday as the path of least resistance once again appears to be to the upside. The bulls continue to make their presence felt despite the largely adverse macro headlines as the latest rally has now pushed the S&P 500 back to within a stone's throw of its recent highs while the Midcap index closed at a new all-time high.

Once again, there did not appear to be any single headline or driver to Wednesday's move higher. There was talk of an uptick in risk appetites on a global basis as well as the usual end-of-quarter window dressing (recall that the moves at the end of the quarter tend to mirror the overall direction of the quarter). In addition, the upbeat numbers from the ADP Payrolls report as well as the takeover talk surrounding Cephalon (NASDAQ:CEPH) were also seen as positive contributors.

From a chart perspective, while the Smallcaps and Midcaps broke out to new highs, the S&P, NASDAQ and Dow still have some work to do in order to return to the previous highs for this bull market cyce. It is also worth noting that there is some resistance overhead on the charts of the blue chip indices. However, given that the leaders are stepping out to new highs, we would be inclined to view this as a potential precursor to the next move in the major indices.

Turning to this morning... Things are fairly quiet as we await the Weekly Jobless Claims numbers and more importantly, tomorrow's monthly Jobs Report. And despite another downgrade of Greek banks and spreads widening in some of the PIGI'S, stock futures are holding up pretty well at the present time.

On the Economic front... Initial Claims for Unemployment Insurance for the week ending 3/26 fell by 6K to 388K. This was a smidge above the consensus estimate for 379K but below last week’s total of 394K, which was revised higher from 382K. Continuing Claims for the week ending 3/19 came in at 3.714M vs. 3.700M and last week’s 3.765M.

Pre-Game Indicators

Here are the Pre-Market indicators we review each morning before the opening bell...

 

  • Major Foreign Markets:
    • Australia: +0.32%
       
    • Shanghai: -0.88%
       
    • Hong Kong: +0.32%
       
    • Japan: +0.48%
       
    • France: -0.48%
       
    • Germany: +0.01%
       
    • London: -0.17%

     
  • Crude Oil Futures: +$0.82 (May contract) to $105.09
     
  • Gold: +$8.10 to $1433.00
     
  • Dollar: higher against the Yen and Pound, lower versus Euro
     
  • 10-Year Bond Yield: Currently trading at 3.414%
     
  • Stocks Futures Ahead of Open in U.S. (relative to fair value):
    • S&P 500: -1.70
       
    • Dow Jones Industrial Average: -6
       
    • NASDAQ Composite: -3.42

 

Wall Street Research Summary

Upgrades:

  • Netlogic Microsystems (NASDAQ:NETL) - Auriga
     
  • Cavium Networks (NASDAQ:CAVM) - Auriga
     
  • Acxiom (NASDAQ:ACXM) - BMO Capital
     
  • Apartment Investment (NYSE:AIV) - Citi
     
  • Hess Corp (NYSE:HES) - Target increased at Credit Suisse
     
  • Emerson (NYSE:EMR) - Deutsche Bank
     
  • Cigna (NYSE:CI) - Oppenheimer
     
  • United Health (NYSE:UNH) - Oppenheimer
     
  • Pep Boys (NYSE:PBY) - Stifel Nicolaus

 

Downgrades:

  • Flowers Foods (NYSE:FLO) - BB&T Capital Markets
     
  • OpenTable (NASDAQ:OPEN) - Citi
     
  • Cooper Industries (CBE) - Deutsche Bank
     
  • Bristol-Myers (NYSE:BMY) - Jefferies
     
  • Aetna (NYSE:AET) - Oppenheimer
     
  • Cephalon (CEPH) - UBS

 

Long positions in stocks mentioned: UNH

For more "top stock" portfolios and research, visit TopStockPortfolios.com

 


The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStockPortfolios and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

The information contained in this report is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (NASDAQ:HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.

Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.

Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.