The bulls had a fine outing on Tuesday on the strength of lower oil prices and a rebound in the Financial stocks. Trading was flat for the first 30 minutes as the bears tried to push the market lower but with oil hovering below $105, the bulls saw an opening and made a strong run by lunchtime. Afterwards, the market spent much of the day above prior resistance and held up well into the closing bell.
The Dow added 124 points to close at 12,214 but more importantly, the index made a solid move above 12,200. The S&P gained 12 points to finish at 1,321 but just shy of our 1,325 target. The Nasdaq was up 20 points to 2,765 and closed below our near-term target of 2,800.
Financial stocks showed signs of life after Dow component Bank of America’s (BAC, $14.69, up $0.66) CEO, Brian Moynihan, said the company has the ability to earn up to $40 billion a year in pretax earnings when the business stabilizes. He was speaking at the bank’s first investor-day conference in over 3 years and added the bank has no intentions of making more acquisitions and will focus its efforts in cutting costs and creating shareholder value.
This lead to speculation that banks could hike their dividend in the near future and other Financial stocks followed suit higher. PNC Financial Services (PNC, $63.37, up $2.67) surged over 4%, while our favorite, JPMorgan Chase (JPM, $46.40, up $1.21) jumped nearly 3%.
We have mentioned over-n-over that the Financial stocks would have show some muscle if the current bull market were to continue and yesterday’s move was encouraging. However, we will need continued strength from the sector if the Dow is going to challenge 13,000 by mid-April.
Our current trades got a nice pop yesterday and we mentioned we have a number of candidates on our Watch List that are interesting and are moving up. We have added a few charts in today’s Members Area to give you a clearer picture on what to expect from a few of our longer-term trades. The charts are easy reads and we cannot stress the importance on using charts when trying to find trades.
Futures are pointing towards a slightly higher open: Dow (+15), S&P 500 (+2); Nasdaq 100 (+1). Subscribers, check for the updates.]]>