The market exploded upward today as buyers, worried about missing the rally, came in strong today. After a gap up this morning, and only a minor pullback at lunch, the market surged upward during the afternoon, led by of all groups, the financials to close at the highest level since mid January. We’re now positive on the year.
Much as I was worried about several weeks ago, as the market has slowly churned higher the past week or so, seems as if money of the sideline got real nervous that we may not actually get a pullback to make their buys. So when in doubt, chase. The Dow closed up 214 while the SPX added nearly 30 points to close at 907.24. Nearly everything was strong today including all the energy related sector including solar, Semis and Ag. But the star of the day was the financials with the BKX tacking on a whopping 15% today. The reason was that the small uptick in housing stats led many to believe that the banks are now out of trouble. Good luck. Guess these are the same banks who had to connive and use every trick in the book just a week ago to show any earnings. Even the report leaked that WFC would have to raise additional capital could not dent the enthusiasm. The top performers were JPM, WFC and AXP, up anywhere from 10-24%. Just amazing.
In other markets, gold barely finished on the positive side after being up big early in the day and silver finished in the red after being up early. The dollar was down just slightly.
I’m enclosing two charts tonight, the 5min showing the break to the upside today and the 60min SPX showing we’re not quite out of the woods yet.