9:00am (EST)
The market ended mixed on Tuesday although the bulls “unofficially” won the session by taking 2-out-of-3. We went into yesterday’s session hoping to at least hold Monday’s huge gains and that mission was accomplished. We also wanted to see a test past resistance which also got a check mark.
Although the fade into the close was a washout, the market did about what we expected as there are still worries ahead of us. Italy struggled to sell debt again and had to pay nearly an 8% yield for three-year notes. Of course, the ratings agencies were tripping over themselves to state the obvious again. The rumor mill has Standard & Poor’s cutting its outlook on France’s credit rating any day now and Fitch, which affirmed the United States’ AAA credit rating, but cut their outlook to “negative”.
These headlines could have been a back-breaker last week but the flow of good news continues to improve. Cyber Monday turned out to be a record-setting day, following Black Friday’s spending bonanza, as sales topped $1.25 billion.
The Dow gained 33 points, or 0.3%, to close at 11,555. The blue-chips traded to a high of 11,624 but failed to close above our magical 11,600 target. Support at 11,400-11,350 still needs to be watched liked a hawk.
The S&P 500 added a field goal, or 0.2%, to finish at 1,195. The index reached a peak of 1,204 before falling back below 1,200 in the final hour of trading. We will look for 1,175 to hold on a pullback with 1,225 representing continued strength.
The Nasdaq dropped a dozen points, or 0.5%, to settle at 2,515. Tech tested our 2,550 target and held 2,500 after hitting a high of 2,542 and a low of 2,508. The 2,450 level represents the next wave of support if the 2,500 level is taken out.
A lot has happened overnight, literally, as futures were pointing towards a nasty open after S&P downgraded 14 banks around the world late last night. Europe had seemingly backed away from its bailout fund goals and the overseas markets opened lower. However, that all changed this morning after central banks from around the world announced coordinated actions to provide liquidity towards the situation.
We also got a great jobs number from the private sector and futures are soaring on both catalysts.
As we head to press futures look like this: Dow (+268), S&P 500 (+34), Nasdaq 100 (+58). We could be ringing the register on a number of trades this morning so stay tuned.
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