Looking at the Data

8:30 am EST Durable goods came out this morning and was better than expected. While we all know that the durable goods number is extremely volatile and is a mediocre economic gauge, the number was positive. When you combine this with some of the other economic numbers like retail sales and home sales, there are some better-looking numbers out there. Remember, the market looks forward. There is a sense out there that some of the numbers are either improving or at least not falling off a cliff. That is promising for the bulls.

The true sign of a market recovery will be earnings season coming up. I won't be putting much weight on how the quarter went, but what the executives of the companies are saying. I will be looking for them to say things got better near the end of the quarter and things are "not as bad" for the coming quarter. There are certain sectors that will be faring better than others, but on the whole, I want to hear a general feeling that things are not as bad. CEO's have a much better read on the economy than the government does. The government just reports the numbers (and the numbers can be iffy anyway) whereas it's the CEO's job to truly feel out the economy and make decisions based on their outlook.

Of course there are still places to make money in this market. One stock I am now looking at is Newell Rubbermaid (NWL). They announced a dividend cut and a note offering yesterday. The stock sold off hard on heavy volume. While I am not a buyer today, I am keeping an eye on it.

This stock is in line with the themes I have been using in this market recently. Once a stock comes out with horrible news, the stock sells off and the expectations are lowered as much as possible. With extremely low expectations and huge capitulation selling, a stock can be set up for a nice move to the upside. I have been on the lookout for these recently and they have been very profitable. I will keep you updated. Until next time, stay low risk..