Friends
Stocks continued to add to their recent gains today, as the bears continue to be frustrated. Remember, the market can always confound the majority of people the majority of the time. Pundits are referring to this as the most unloved advance of all time, and that is understandable with all the problems economies around the world face. How can stocks rise when everything seems so bad? Yes, stocks seem to be climbing that daunting “wall of worry”.
For the day, the Dow Jones Industrial Average was up 50 points to close at 13,168. The S&P 500 finished the day up 7 points to close at 1401. Gold was down $1.90 to trade at $1614 per ounce, while oil continued to climb (remember pundits calling for prices in the $50’s because of demand destruction) ending the day $1.23 to the positive to trade at $93.43 per barrel WTI.
If the S&P 500 can get through the 1420 to 1425 level, watch out above. The bear’s hair will be on fire. So many hedge funds are negatively biased and way behind the market averages that short covering and a buy panic could set in. You are beginning to see a rotation in the market as the defensive stocks are stalling a bit while the industrials and economically sensitive shares are rallying. This is actually a good sign if you’re a bull. Rotation out of “give me a place to hide” stocks into “maybe things are getting better” stocks is what the market needs to work its way higher. If you’re a bull, do be aware that our economic problems have not gone away, and can rear their ugly head at any time, but in the meantime you’ve got the bears totally frustrated. If you’re a bear, you can hang your hat on the fact that volume has been extremely light, which is not a good confirmation of the rally.
Let’s see how the rest of the week unfolds.
Have a nice evening everyone.
