an tSionna 3.26.09 Stock Price Action

Stocks are in the midst of their largest price rally in years. The S&P is on track for a double digit monthly gain in March and is up better than 25% from its bottom price of 666.79 on 3.6.09.

What clues to look at going forward? Well for one thing stocks are back trading within the range they broadly established after their 11.26.08 bottom. They are actually trading above that number by about 4% right now. Another clue is that stocks have successfully penetrated their downward sloping trend lines-some of which go back to last summer. They have also penetrated their 50 day moving average which is a good shorter term indicator of equity buying interest.

It is the end of the month and quarter so it is possible that we are simply seeing end of quarter/month mark ups. But the evidence is starting to accumulate that perhaps the worst is behind us (again unless something new that is not foreseen by investors washes over the transom).

I don't think stocks are going up in a straight line and I think its possible that we see some sort of pullback next week as April begins. But I also think we need to consider that any short term correction will be bought and I think we have to begin to entertain the possibility that 900 on the S&P is a realistic goal in the next 3-6 months. Again there is no guarantee that this will happen but it is beginning to emerge as a very likely scenario and one we must now incorporate into the game plan.

*Long ETFs related to the S&P 500.