Friends,
Italian Prime Minister Silvio Berlusconi must not have gotten enough “likes” on his Facebook post yesterday when he indicated he was not stepping down. A day later, and indeed, he is stepping down. Stocks rallied on the news (I am not sure why) as the Dow Jones Industrial Average finished the day up 101 points to close at 12,170. The S&P 500 finished the day up 14.81 points to close at 1,275. I am not sure what actually was solved today in Italy or Europe for that matter, but I guess the basic “throw the bums out” mentality ruled the day. As far as stocks are concerned, both the Dow and the S&P are holding above important levels. We would like to see the Dow hold that 12,000 level for a week or two and perhaps we can muster a year-end rally and attempt to capture the 13,000 mark. As far as the S&P 500 goes, we stayed above the 1,260 area for another day. Again, if we can hold this key level for a week or two maybe we can challenge the highs set earlier in the year around 1370 or so.
Gold briefly got above the $1,800 level but pulled back to close near $1,785, down $6 for the day. Oil was up near $97 per barrel WTI late in the session, up another $1.50 for the day.
It is encouraging to see the markets absorb the mania in Europe over the past several weeks, with a few exceptions of course. Hopefully, we can continue to climb the “wall of worry” that so often is common in these types of moves, ones that often catch a lot of traders off guard. Maybe we get the short and under-invested money managers to panic a little and buy into the year-end and attempt to save their year. We won’t get too ahead of ourselves and will take it one day at a time, but for the moment, stocks look resilient and perhaps poised to make a move over the next couple of months.
We’ll keep an eye on the headwinds (gang of 12 next week and never ending Euro problems) as we go forward, and look for opportunities that may develop. Have a nice evening everyone.
