Another great day. Both the Dow and the S&P were up over 2% again today after staging a vicious late day rally yesterday. The Dow gained another 175 points and the S&P another 18 to close at 832.86 The market gapped up this am, pulled back some at 10:30 and then proceeded to steadily climb the balance of the day with the exception of a rather weak try by the bears to take over in the early afternoon, which was quickly squashed. Metals were flat for the day, the dollar rebounded some and oil closed at $54.
So is it end of the quarter window dressing, short covering, funds worried about missing the boat; we’re not sure, but we’re loving the result. There are a lot of stocks that are up over 50% in the past three weeks and I think a lot of money managers are starting to feel the heat. Even though common sense and experience, not to mention longer term technical indicators all show that we’re in the middle of a bear market rally, if you’re sitting on millions and/or billions of dollars in cash, ie T-bills, you’ve got to be getting pretty nervous here. The higher we go, the more the pressure builds. Here we are now up for the year and if you’re sitting in cash, not a good report to send to your shareholders and clients in a few days. So despite the fact that we’ve got some serious resistance coming up here shortly at the 840 level, I think we could still feel some upward pressure till the end of the month.
Today was tech day in the market. Techs were on fire. INTC was up 6%, KLAC was up 6%, CSCO was up nearly 5% and even MSFT which has been trading pretty weak lately, was up $.95. Solar stocks had an outstanding day also, with FSLR up over 20 points at one time though only finishing up 16 for a 12%+ move today. LDK was up 32%, TSL up 40%, JASO up 42% and SOLF up 42%. AG stocks had a good day also with most the majors being up about 6%. The financials finally took a little breather and were basically flat on the day. Oils had a pretty good day with the refiners, TSO and VLO , leading the way, while the oil service sector was flat and the coal stocks were up 3-4% on average.
The general feeling has been to not chase this rally and wait for a pullback, but what if we don’t get one, or was the early afternoon selloff yesterday it? Though not inclined to chase any stocks here, this sector rotation we’re seeing is a positive factor. As you can see from the chart below, we’ve got resistance overhead that may cause us a stumble and we may have to take a breather day, but this market continues to feel pretty darn strong at this point despite being over-bought on some of the short term indicators.