9:15am (EST)
The bulls got good news over the weekend as we told you yesterday the eurozone leaders seem determined to come up with a plan to recapitalize the European banks. The plan-for-a-plan to fix Greece should be in place ahead of the G-20 summit at the start of November. The fact there this is a continued commitment to get something in place sounds good but the reality is that Greece will probably default sooner or later and the steps being taken should cushion the fall.
Monday was a holiday so we didn’t expect a ton of news ahead of the start of the 3Q earnings season. With the bond market closed, volume was light all around but the action was heavy as the bulls were able to push the major average past their 50-day moving averages (MA’s).
The Dow gained 330 points, or 3%, to finish at 11,433. The blue-chips easily surpassed our 11,350 target which sets the stage for a run to the top of the trading range which is at 11,500-11,600. Dow component, Bank of America (BAC, $6.28, up $0.38) closed above $6 after testing a 52-week low of $5.13 last Tuesday. It may not sound like much but a 20% bounce off the lows in a week is good work.
The S&P 500 was up nearly 40 points, or 3.4%, to settle at 1,194. The index went out at its high and the bulls are within spitting distance of cracking 1,200 again. A break above this level could lead to the 1,225 level which represents the next hurdle if cleared.
Tech stayed hot as the Nasdaq jumped 87 points, or 3.5%, to end at 2,566. The index made a huge move above 2,500 and we mentioned in our Weekly Wrap 2,600 could come into play on continued momentum.
As far as this morning, futures are pointing towards a lower open: (Dow -65), S&P 500 (-9), Nasdaq (-10).
We have a NEW TRADE we are trying to get into this morning so we have to cut it short. Subscribers, pay close attention to the “limit price” we have in place for the new recommendation and stay alert on the “hard stops” we have set inside our Members Area to protect profits.
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