After taking a breather yesterday, the market resumed it’s upward bounce in impressive fashion today. The market opened with a 6-7 point pullback the first 15min, but from then on it was onward and upward the remainder of the the day so that by 10:30 we were right in the middle of a resistance zone in the 735 area. Pulling back slightly to catch it’s breath, by noon we were in a steady uptrend which gained momentum throughout the rest of the day. The net result was a DOW that closed up an additional 3.5% and a S&P that was up slightly over 4%. This was despite MSFT which didn’t participate at all, though once again the techs and semis were strong across the board.
Oil prices moved higher, above $47, as did gold, while the dollar showed a little weakness. The oil stocks did not really participate today until after lunch and then made a nice catchup move this PM. AG stocks failed to participate at all, trading pretty much mixed throughout the session. Financial Stocks were once again the shining stars today with many, such as COF, JPM and BAC up over 15% today and the BKX being up over 11%. Brokers were also strong. The result is that some of the financials are up 30% the past three days. GE, now considered a hybrid, was up over 10% again today. Everyone’s favorite 2-1 financial trader SKF dropped a whopping 30 points today so that in 10 days its had a perfect round trip from the 140 range, up to 265ish and back down to 140ish again. Breath taking for those on both sides of the trade.
So where do we go from here. I’ve taken the liberty of drawing in some near term resistance levels in the SPX 60min chart below. Despite over a 500 point move in the DOW the past 3 days, we’re still only barely 1/2 way recovered from our breakdown at the 800 level just a few weeks ago. So even though I’ve been eagerly awaiting this bear market bounce, I think we’ll have some backing and filling as we make our way upward. How far can we go? The pundits are calling anywhere from the 800 level to 900 and even a 1000 on the S&P. We’ll look at some fibonacci levels later, but for now I took a few of my long positions off the table and lightened up a little on some of the others, notably AMZN and the Q’s. I’m still long some XLF calls and some AXP from the 10 area.