The S&P 500 found support on its 50-day moving average and we had an “outside” day. The closing price of the S&P 500 exceeded the high of the prior session. Economic numbers – retail sales and initial jobless claims – are good and there is a growing positive expectation that Bernanke will temper the tapering angst when he speaks next Wednesday.
U.S. stocks are not overbought or expensive on a historic basis. In a rising interest rate environment, they may also become the safe haven for many more investors as bonds show surprising downward volatility.