Friends
As old Monty Hall used to say “let’s make a deal”. A nice rally in stocks today was attributed to reports that a deal on the budget seems to have been reached (but not yet blessed by the President), and that there appears to be progress on a deal with China(of course, those tea leaves are next to impossible to trust). Nevertheless, the markets like deals, and more importantly, the more uncertainty that can be taken out of the situation, the better. Stocks got off to a good start this morning and were able to add to those gains as the trading session wore on.
By the close, the Dow Jones Industrial Average was up 372 points to finish the day at 25,425. The S&P 500 was up 34 points to close at 2,744. Gold was up $2 to trade at $1,314 per ounce, while oil was up $.70 to trade at $53.11 per barrel WTI.
Again, stocks are bumping up against resistance, and both the bulls and the bears seem to be a bit on edge. If the bulls can push through, the bears will be left to play defense, which could actually push stocks even higher. On the other hand, if the bulls fail, the bears can claim the resistance held again and that a retest of December’s lows is still in the cards. Amazingly, stocks lost nearly 20% in less than 90 days last quarter, and have recaptured about two thirds of that in less than 45 days so far this year. Even the most ardent bulls have to be surprised by the power of this rally given the circumstances. Let’s see if the government deal gets done this week and if we can get that uncertainly behind us.
Have a nice evening everyone.
