Bulls Dominate

The market struggled early in the session as traders took profits from earlier in this week. By the afternoon, stocks had ripped higher because the bears are still on the ropes from Apple (Nasdaq: AAPL) earnings.
Many bears positioned themselves for a steep drop this week (right before AAPL earnings). Not even a U.K. recession and terrible durable goods in March could hold the bulls back after the earnings announcement hit. The next area of protection for the bears is 1401. After that it's off to new highs. The bears must hold 1401 this afternoon.
Banks, small caps and technology continue to provide some measure of leadership. Each outpaced the SPX yesterday, although the Nasdaq matched the return because AAPL encountered a wee bit of profit taking.
The bulls dominate the larger trend and it appears that they also control near-term price direction. So long as the bulls rally at the end of the session (expect profit taking during the middle of each session) and also hold 1383, the positive trend should continue.
Today, government officials released U.S. GDP estimates for the first quarter. Experts anticipated 2.5% growth. That would be a decline from 3% last time.
Official results showed a 2.2% increase to U.S. GDP. That is much lower than expected, but it's still growth. Much of the world has started to contract but the U.S. keeps humming along. Let's watch the dollar today. It would normally rise as investors rush into safety assets but if the bulls are truly in control then it should fall. A falling dollar is great for most stocks.
Keep in mind that two European countries entered recession this week: the U.K. and Spain. Should the U.S. slip into a recession the world, the dollar and most stocks would be in big trouble –  my bet is France records negative growth before us.

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