There was another strong rise on Wall Street with no pullback trigger in sight. Better than expected home sales numbers and a good report from AIG, which was a name in the thick of things when everything on stock markets went pear-shaped, helped the market.
Only the stress tests could hurt the positive sentiment but even here Citigroup has argued in the Financial Times that the Wall Street Journal story, which said it needed capital, was incorrect.
This latter rise is important as it leaves behind a very important resistance level of 875.
Chartists say that the new resistance is now 1050-1055 while the support level is 825-845.
The big news was pending home sales jumped in March. This surprised analysts and makes a case that the real estate market is bottoming.
The market was a bit spooked by Obama-talk of a tax crackdown on loopholes used by the wealthy, but it did not hurt the overall result. I think we will see this kind of ‘talk’ here as well at Budget time next week.
The local stock market will find it hard to ignore this strong move, and by the way, this strong rise on Wall Street will help business and consumer confidence and assist our economic recovery.
For dollar watchers, we’re now at 74.06 — Wall Street is determining its fate nowadays.
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