We told you in our afternoon update yesterday to expect volatility into the close and it seemed as if no one wanted to be long. Except us.
Most of the sentiment after Europe’s market closed was negative and with the indexes down at halftime, the talking heads and Wall Street pros were calling for a lower market. We weren’t too sure on what the final tally would be or which side would win but what we did notice was the bulls holding support and economic news was coming in better-than-expected.
Sure, we were worried about Europe but the action was favoring the bulls as the bears should have been able to crack support given the headlines. To us, the market looked like it could go up no matter what Europe decided to do.
We said that it appeared “new” money was coming into the market and shortly after our update, the market tested support one more time before turning on a dime. All it took was news that China was going to throw some money into the EU pot to save Europe and it was off to the races.
The Dow gained 162 points, or 1.4%, to finish at 11,869. The blue-chips tested a low of 11,694 but never came close to tripping 11,600 which is near-term support. The index traded to a high of 11,891 and was able to reclaim the 11,800 level which was a good sign as the bulls continue to push 12K.
The S&P 500 added 12.95 points, or 1.1%, to settle at 1,242 on the dot. The index slipped to a low of 1,221 which was just under support at 1,225-1,220. The high was 1,246 and if the bulls can clear resistance at 1,250 there should be another wave of short-covering which could push the S&P up near 1,275.
The Nasdaq popped a 12-pack, or 0.4%, to end at 2,650. Although Tech lagged and struggled all day, the bulls reclaimed 2,650 and held 2,600 which was what we wanted to see. The 2,700 level still represents strong overhead resistance but the bulls still look like they are making a run for it.
Wednesday’s rebound was helped by the strong gains in the Financial stocks which advanced 2%, on average. It is still hard to trust them but we are looking at some names and some options to play 3 months out. We have added one Banking stock to our Watch List that doesn’t have any European exposure and shares are a steal in the mid-$20’s.
Of course, the good news this morning is that Europe did get something done last night and Dow futures were up triple-digits before the European markets even opened. We will have the details in our afternoon update but as we head to press, Dow futures are up 228 to 12.030 while the S&P 500 futures are advancing 30 points to 1,267. The Nasdaq 100 futures are higher by 53 points to 2,379.
We added two more new trades yesterday and we have some action happening with a couple of our other picks this morning. We got some good earnings reports after the close last night that should have an impact on our current trades. We also have another triple-digit winner on our hands which could continue to move higher.
Subscribers, check the Members Area for the updates and the Watch List, which continues to be hot, for new candidates. Also, pay close attention to all of our details for each trade because the cash register could be ringing all day as we try to close a few more trades into strength.]]>