Friends,
Stocks enjoyed a very nice rally today with the Dow Jones Industrial Average up 254 points and the S&P 500 up 33 points to close at 1210. Even though volume was light, it was nice to see the S&P climb above the 1200 resistance level. If we can hold here for a few days we might be able call 1200 a new support level with 1250 being the next major resistance level. Stocks were buoyed by news overseas that two Greek banks were merging (somehow two wrongs do make a right) which sent the Greek stock market soaring higher. Then on the domestic front, we got relatively good personal income and domestic spending numbers. Of course, we have some very important numbers coming later in the week, first being the ISM Manufacturing Index on Thursday and then the jobs number on Friday.
Wednesday marks the end of the month, so if we don’t get any disturbing macro news before then, stocks might be able to rally another day or two. The tone for September may be set on Friday when we get the jobs number, for as we have said for two years now, we must have an improving jobs picture before sentiment will improve. We need to break the negative feedback loop that tends to cause things to slow down and become self-fulfilling.
Oil was up more than a couple of bucks rising above $87 per barrel and gold was down about $10 trading near $1787 late in the day. Today was more “normal” with gold down as stocks rose.
We will keep you informed as things develop this week.
Have a nice evening everyone.
