The market got off to a great start on Monday after a better-than-expected rebound in retail sales helped push stocks to yearly highs. Retail sales rose 1.4% in October, nearly double the 0.8% increase forecast by Wall Street. It was a huge rebound from the 2.3% decline in September. Even Ben Bernanke couldn’t mess yesterday’s rally up.
The Dow jumped 136 points, or 1.3%, to finish at 10,406. The S&P closed above the 1,100 level for the first time in more than a year by adding 18 points to finish at 1,109. The Nasdaq finished just below 2,200 and tacked on a 30 point gain to settle at 2,198.
We hate to sound like a broken record but here is what we said Sunday night in the Weekly Wrap:
”Our near-term targets for the Dow remain 10,300-10,400 to the upside and 9,650 is short-term support.” Well, the Dow reached a high of 10,357 and hit a high of 10,332 on Friday. If the Dow can break 10,365 then we could looking at, get this…10,850. If that were to occur then 10,300 would become solid support. Lower support still remains at 9,650.
The S&P 500 gained 24 points, or 2.3%, for the week and closed at 1,093. We mentioned the index was having trouble with the 1,100 level but did break the magical number twice last week. It was a little concerning though that we could not CLOSE above 1,100 but we should this week if the bulls continue to push. That could pave the way for a run to 1,200. The bottom of the range is 1,000 and even down to 970.
The Nasdaq made the biggest gain as it surged double nickels (55 points, or 2.6%) to finish the week at 2,167. We are looking for a close above 2,175 which could take us to 2,275. Support is at 2,000-2,025.”
As you can see, we closed above all of these resistance levels on Monday and we talk a little more about what this means in the Members Area.
Although futures are pointing towards a lower open this morning, we think the bulls are ready to run this week. The close above 1,100 on the S&P was huge and it could lead to some continued short covering by the bears.
We are trying to take advantage of this morning’s weakness. We have profiled TWO trades this morning in the Members Area that should do well if the market continues its winning ways. Current subscribers, check for the updates…