The bulls got off to a great start this morning as they made a push to prior support levels but the action is favoring the bears as these levels are now trying to hold as resistance. When a stock or an index breaks a key support level, usually there is a back test before another leg lower. If the stock or index reclaims this level then it can be considered an “overshoot”. We are in the early stages, naturally, as we wait to see what unfolds but the lower highs and lower lows are consistent of a trend change.
Economic news came in better-than-expected as Jobless Claims fell 30,000 to 339,000 which marked the lowest level since early 2008. The problem is that this number is also being scrutinized as one state didn’t have their tally ready and those figures will be reflected next week. This follows last week’s “surprising” drop in Nonfarm Payrolls from 8.1% to 7.8%.
Shares of Sprint Nextel (S, $5.73, up $0.69) are up 14% after the company confirmed Softbank, a Japanese mobile-carrier, was talking to them about buying a majority stake in Sprint. Clearwire (CLWR, $1.78, up $0.48) is also up on the news because Sprint owns a majority stake in that company which could also be in the mix. (continued…)
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