Intraday Market Update
Stocks were under pressure early this morning after higher than expected weekly jobless claims data, but the losses were erased after a very strong April Empire State Manufacturing survey was released, which registered just below the 5-year high that was seen in October 2009. The survey indicated that activity is accelerating and growth is sweeping across all areas, including new orders, shipments, inventories, jobs, delivery times, and input prices. A draw in unfilled orders is the report's only negative signal. In the Jobless Claims report, people filing for unemployment jumped for a second week, up +24,000 to 484,000. Continuing claims also rose +73,000 to 4.639 million. Contradicting statements continue to pour out of the Labor Department as they cited the rise in claims was not due to economic factors but to continuing administrative snags as offices catch up with claims during the shortened Easter week. The department also warned that the next report may be affected by quarter-end reclassifications for emergency compensation, but that the chances for downward revisions are greater than for upward revisions.

All of this adds up to whole lot of nothing in the markets as the indices are teetering between positive and negative territory, although all indices did peak out to new 52-week highs. More significantly is the fact that the DJIA is flirting back and forth with its 200-week SMA which is currently at 1,126.35 and a key technical level that needs to be broken for the index to trade higher. The S&P 500 200-week SMA is 1,224.71. The S&P also has a 61.8% Fibonacci retracement at 1,228.74, measured from 2007 highs to its 2009 lows. All of the indices are on pace to close higher 9 out of the last 10 weeks and all of the talking heads on TV are calling for the S&P 500 to reach the 1,220 to 1,1225 area, which is only about 15 points away. If there is another push higher to these levels please be nimble with long positions as squeezing out further gains will become more and more stressful.

In equities, bellwether UPS preannounced Q1 earnings yesterday that crushed not only analyst estimates, but also the company's own guidance that they released in early February. In addition, UPS hiked it full-year earnings view by nearly 10%. Executives stated the results were powered by a significant acceleration in the international package and supply chain businesses and improved operating margins across all three of the company's segments. UPS is up nearly +6% in trading. YUM! Brands reported results that were ahead of expectations and reaffirmed its prior guidance. YUM! emphasized that profits are being driven by international sales, especially in China, and that sales are not performing to expectations in the US. YUM! is up about +3% in trading.

For readers who may be in our SRS position please be aware that there was a 1:5 reverse stock split today on many of the ProShares ETF's. SRS closed at $5.33 yesterday and is currently trading near $27.60. The fair value of shares at $5.33 is $26.65. Therefore SRS is higher by about +3.5%.

Commodities:
Commodities are relatively flat with the exception of natural gas which saw a slightly higher build in inventories. Natural gas is off by -5% and is back below $4.00. Front month crude oil, gold, silver, and copper near break-even on the day.

International Markets:
All major international markets continued motoring higher on Thursday, with the exception of China which was just about break-even. Leaders included Japan (+0.61%), London (+0.50%), and Korea (+0.49%).

Core Sector List:
Overall reading: 9 sectors declining, 7 sectors advancing
Strongest Sectors: Transportation, Internet, Oil Services
Weakest Sectors: Home Construction, Gold Miners, Insurance

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