There were plenty of reasons for stocks to rally today. The most obvious one was that the market was very oversold. But that along with the less hawkish comments by Ben Bernanke and the good earnings news from IBM and JPM really helped propel the indexes higher all day long.
The biggest gain belonged to the Russell 2000 with a 3% gain, the SP 600 followed with a 2.9% gain, the Semiconductor index rallied 2.3%, the Dow Jones Industrial Average rose 2% and regained its 200 dma, the SP 500 gained 1.9%, and the Nasdaq was the laggard with a 1.8% gain.
These big price gains seem to recently come on the days when the Fed is making interest rate comments. If history repeats itself, and is any guide for the future, this rally might not have very far to go and/or will not last that long.
Volume was much higher on the Nasdaq and was moderately higher on the NYSE. Nothing too extreme to indicate funds were trampling over each other to take stock. Advancers beat decliners on the Nasdaq by a 3.5-to-1 margin and on the NYSE by a 6.5-to-1 margin.
The interesting thing about today's trading was the revelation that YHOO and GOOG simply don't seem to matter to the Nasdaq and the market anymore. The big hits both of these stocks took gave me the impression any bounce would be weak because of the hits these stocks took. I was proven very wrong. It looks like the market has turned its attention away from these past leaders.
Looking through my charts, I still don't see any beautiful bases with breakouts right around the corner, in new exciting leading sectors. But that could change with another month of constructive gains. However, as of now, there are no good looking charts with good fundamentals breaking out. All the breakouts I am seeing are from ugly, wild, and choppy bases. At the same time, it is not wise to short, as we are way oversold.
Let's get ready for another day of either wild and exciting action or a dead-quiet boring trading session. No matter what the day brings, we still know what the trends are. Short-term is up and long-term, intermediate, and sub-intermediate is down. But basically it is flop, chop, chop, flop, no trend, up, down, flop, chop, and flop.
Great luck out there and I will see you at Investors Paradise.
New Swing Longs: TBBK RMR
New Swing Shorts: NONE
Longs Outperforming: IHS-56 GMTC CTCI-87 PMTR-75 HSR-73 UARM ITG OMNI-164 LRCX-33 SMSI-69 HMSY TZOO GPIC-27 RNST PAY-36 ABI SEIC BWP ABFS BMR CXW LMT LEAP DGX CPY AKAM-106 GISX TYL CVO-109 IDEV DDS Q-70 ALTH GEF HNZ MGLN
Shorts Outperforming: NTE
Stocks On Radar Screen: VLY BOT TAL TCK WOLF FRP WRE GGI
Short Crusher: PKG CBSS BKUNA -- it happens.
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