Stocks continue to surge higher as the Dow Industrials posts a triple-digit gain, up 168 points at 10,136 and semiconductor stocks as depicted by the Semiconductor Index (SOX.X) jump 6% at 541 as investors appear bullish ahead of Wednesday's testimony by Fed Chairman Alan Greenspan before his testimony before Congress.
Many Fed watchers feel that near-term economic data like today's existing home sales may have Mr. Greenspan losing some of his more cautious testimony Wednesday morning as he and other market participants digest economic data.
Economic data still to come will be in the form of Consumer Confidence which I have scheduled for release tomorrow morning at 10:00 AM EST. Consensus is for a reading of 97.4, which would be fractionally higher than January's reading of 97.3. Then on Wednesday morning, just prior to Mr. Greenspan's testimony is durable goods orders, which are expected to show a gain of 1.2% for January and New Home Sales where consensus is looking for a number of 939,000.
For some Fed watcher, today's existing home sales looks to be an "ace" that was dealt to the bulls and further upside surprises from near-term economic data may have Mr. Greenspan upbeat in his testimony on Wednesday.
Dow Transportation Average (TRAN) - Daily Interval
We continue to monitor the Dow Transportation Average (TRAN) closely and this group has continued to trade rather strong considering past market action. This has had "economic bulls" still showing some horns base on our scenario that this group may give hint of the MARKET's perception of how the economy is doing. As we have noted in the past, the transports are often thought to be one of the leading groups of stocks to show bullishness in the early stages of economic recovery. There ability over the recent couple of weeks to hold above their 200-day moving average has had bulls holding on to the thought that the economy is indeed showing some signs of strength. This may also be the MARKET's perception as all participants are able to buy long or short this group of stocks. A move above the early January highs of 2,840 could have this group of stocks making a bold move to retracement at 2,933 and provide further bullishness to the broader market if an economically sensitive sector catches some fire.