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Both the Dow [ .DJIA 10624.69 
+12.85 (+0.12%) ] and S&P 500 [ .SPX 1149.99 
-0.25 (-0.02%) ] rallied on Thursday following four losing sessions as data showed the U.S. economy grew faster than expected in the third quarter after more than a year of contraction.
Specifically, better than expected GDP numbers sent the bulls off and running after the latest numbers showed the economy expanded at a 3.5%, unofficially ending the worst recession in 70 years. Also quarterly profits at consumer product giants Procter & Gamble [ PG 63.32 +0.15 (+0.24%) ] and Colgate-Palmolive [ CL 84.15 +0.07 (+0.08%) ] both surpassed expectations, and lifted investors sentiment.
What should you be watching?
I’m still negative on the market, explains Christopher Zook of CAZ. The pop today is likely a reaction to the overly pessimistic reaction to GDP we got on Wednesday afternoon. But I’m more focused on the uptrend that started on March 9th. That trend line is now broken. That says to me we’re on a neutral path not a bullish one.
I’m also closely watching patterns in the S&P [ .SPX 1149.99 -0.25 (-0.02%) ], explains Greg Trocolli of Opalesque. Specifically, I’m closely watching 1066 as an inflection point. If we get above 1066 all short bets are off.
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