Friends
Stocks enjoyed a very nice rally today, as traders leaning negative decided to cover their shorts ahead of Dr. Bernanke’s testimony tomorrow. The bears are also a bit concerned that the European leaders may throw a Hail Mary pass and come up with another Band-Aid to put on their financial wounds. Another catalyst attributed to the rally is the political outcome in Wisconsin last night. Whatever the reason, stocks were up early and often. For the day, the Dow Jones Industrial Average was up 285 points to close at 12,414 (the Dow is back in positive territory for the year, barely). The S&P 500 was up 29 points to close at 1315. Gold was up $4 to trade at $1621 per ounce, and oil was up $1 to finish the day trading near $85.27 per barrel WTI.
This is definitely a rally that I would not get too excited about. There are still many hurdles that the bulls have to clear before they could even begin to declare victory. If the S&P can get back above 1325 for more than 10 minutes, then I might be inclined to get more constructive on the move. We continue to dance around the 200 day moving average. In the meantime, I think we are in a day by day situation, where every little piece of news or rumor moves the markets. We’ll enjoy the move today, but we’ll keep a close eye on Dr. Bernanke’s comments tomorrow, and of course monitor any news out of Europe.
Have a nice evening everyone.
