Upcoming US Events for Today:
1. Existing Home Sales for February will be released at 10:00am. The market expects 5.05M versus 5.36M prior.
Upcoming International Events for Today:
* No significant economic events scheduled
The Markets
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| Market | Close | % Change | Expected ST Low | Expected ST High |
| Dow Jones Industrial Average (^DJI) | 11,858.52 | 0.71% | 11,838.86 | 12,269.83 |
| Dow Jones Transportation Average (^DJT) | 5,055.95 | 0.73% | 4,998.59 | 5,229.78 |
| Dow Jones Utility Average (^DJU) | 400.18 | 0.44% | 402.85 | 416.60 |
| S&P 500 (^GSPC) | 1,279.21 | 0.43% | 1,279.91 | 1,331.71 |
| S&P/TSE Composite (^GSPTSE) | 13,789.63 | 0.32% | 13,666.32 | 14,160.48 |
| NASDAQ Composite (^IXIC) | 2,643.67 | 0.29% | 2,669.72 | 2,814.33 |
| Austrian Traded Index (^ATX) | 2,789.14 | 1.11% | 2,754.81 | 2,986.72 |
| French CAC 40 (^FCHI) | 3,810.22 | 0.63% | 3,832.24 | 4,126.30 |
| German DAX (^GDAXI) | 6,664.40 | 0.11% | 6,736.62 | 7,391.33 |
| UK FTSE 100 (^FTSE) | 5,718.10 | 0.39% | 5,735.54 | 6,068.07 |
| Swiss Market Index (^SSMI) | 6,098.00 | 0.41% | 6,163.64 | 6,691.52 |
| Brazilian IBOVESPA (^BVSP) | 66,880.00 | 1.00% | 65,372.65 | 67,617.91 |
| Mexico’s IPC (^MXX) | 35,418.50 | -0.57% | 35,878.67 | 37,304.27 |
| Amsterdam Exchange Index (^AEX) | 350.41 | 0.33% | 352.73 | 371.53 |
| Shanghai – SSE Composite Index (000001.ss) | 2,906.89 | 0.33% | 2,812.94 | 2,967.04 |
| New Zealand NZX 50 INDEX GROSS (^NZ50) | 3,339.51 | 0.30% | 3,342.58 | 3,414.34 |
| China HANG SENG INDEX (^HSI) | 22,300.23 | 0.07% | 22,575.89 | 23,623.35 |
| Korea KOSPI Composite Index (^KS11) | 1,981.13 | 1.13% | 1,944.33 | 2,057.92 |
| Tokyo NIKKEI 225 (^N225) | 9,206.75 | 2.72% | 9,295.25 | 10,791.24 |
Markets received a boost of optimism on Friday as G7 nations committed to intervening in the Japanese currency market to offset the appreciation in the Yen since the tsunami and earthquake that decimated the country. Investors also welcomed the news that Libya had agreed to a ceasefire following a United Nations approval of a no-fly zone in the country in attempts to put an end to Gaddafi’s ruthless rampage against rebel forces. However, reports over the weekend indicate that fighting between government and rebel forces persist. Markets immediately jumped on the positive news events, but slowly faded into the close as investors relinquished positions prior to the weekend as uncertainty in Japan and Libya had market participants raise some cash to buffer any unexpected outcomes.
Friday was Quadruple Witching day, a day on which contracts for stock index futures, stock index options, stock options and single stock futures all expire. Positive tendencies for this day and the day prior proved to be positive yet again, even in the midst of incredible uncertainty and fear. The S&P 500 index gained 1.78% over the two days, while the TSX composite gained 1.96%. The day following this event, also referred to Witches Hangover, holds a greater probability of being negative with only 41% of days ending with gains. However, events in Japan and Libya will dictate the trade to open the week as investors seek clarification.
Technicals continue to reveal that key indices remain within a downward channel that began mid-February. On the S&P 500 index, 1300 marks the breakout point to bring an end to this pessimistic trend that has resulted from tensions in the Middle East and North Africa, as well as the difficulties in Japan. The issues in these countries continue to be very volatile and we’re looking for the easing of these uncertainties to resume or begin the seasonal trend that takes markets and sectors higher into May. Seasonal prospects remain favourable. Last month we anticipated a significant number of dividend increases and share buybacks, as is seasonally recurring at this time of year. Cisco, JPMorgan, Wells Fargo and US Bancorp were among the many that reported a return of capital to investors on Friday. So seasonal events continue to occur in this market, but obviously other more serious events, namely Japan and Libya, are hindering seasonal outcomes. CEOs love to give good news at the end of the first quarter and into earnings season that begins in April — FedEx just recently issued optimistic guidance for quarters to come. Look for more of this in the coming weeks. Markets continue to be a buy at this juncture with higher equity prices by year-end looking promising. Downside risks continue to remain to around 1225 on the S&P 500 index, however, the risk/reward potential of the market continues to favor the upside.
Sentiment, as gauged by the put-call ratio, remains elevated at bearish levels. The ratio closed at 1.02, marginally off the highs of the week, but still enough to be considered overly bearish, suggesting a signal to buy according to the contrarian take of this indicator. Last week sentiment and technical indicators were comparable to those witnessed at the end of August last year. Put-call ratios were last this bearish at that time, the number of stocks above 50-day moving averages hit the lowest level since the end of August, and the volatility index last crossed below 25 to begin the month of September. A six month rally progressed following these outcomes. A test of recent levels of support at 1260 on the S&P 500 may be possible in the short-term, completing an apparent reverse head-and-shoulders pattern on the S&P 500 futures one-hour chart, with the neckline around the 1280 level. This would provide reasonable assurances that a bottom has been put in place and the resumption of seasonal and cyclical patterns.
Sectors that Moved the Market
| Sector | % Price Change | % Volume Change |
| Energy Sector (XLE) | -0.46% | 14.90% |
| Basic Materials Sector (XLB) | 0.48% | -33.91% |
| Financial Sector (XLF) | 1.37% | 71.55% |
| Health Care Sector (XLV) | 0.47% | 58.95% |
| Consumer Discretionary Sector (XLY) | -0.05% | 183.07% |
| Industrials Sector (XLI) | 0.64% | -37.38% |
| Technology Sector (XLK) | 0.16% | 61.17% |
| Utilities Sector (XLU) | 0.49% | -25.09% |
| Consumer Staples Sector (XLP) | 0.80% | -13.12% |
Financials were the clear leader on the day as a result of a number of dividend increases that were approved for the healthiest of banks in the industry. This event was largely anticipated by investors and the result didn’t fail to disappoint. Financials remain within their period of seasonal strength through May, however, the US financial sector has yet to show definitive strength since the period began on March 9. Canadian financials have been outperformers since the beginning of February.
The price of oil came under slight pressure to end the week as Libya agreed to a ceasefire. The result pressured energy stocks lower following another stellar week for the sector, which produced gains in the midst of the strong negative moves across sectors and indices.
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