9:05am (EST)
We aren’t sure how long the new sheriffs will be wearing their badges, but the bulls seem determined to stay in town for awhile. We went over the catalysts that spurred the market’s latest rally, and the bulls want more this morning, but as futures are pointing towards another higher open.
The Dow finished Monday with a gain of 101 points, or 1%, to finish at 10,525. All but one of the Dow’s 30 blue chips ended the day higher with Wal-Mart Stores (WMT, $51.13, down $0.04) being the lonesome loser. More importantly, it was the third straight day the index has added triple-digit pops and is now positive for the year by 0.9%.
The S&P 500 jumped 12 points, or 1.1%, to settle at 1,115 and closed above its 200-day moving average (MA) for the first time since late June. Technically, the index is still slightly in the red for 2010 by 0.09 points but is looking like it wants to test the 1,125-1,150 area.
The Nasdaq chipped-in with a 27 point advance, or 1.2%, and settled at 2,296. The Tech-rich index also closed above its 200 day MA – for the second straight session – and was testing the 2,300 area right into the closing bell. We mentioned in our Weekly Wrap we could see a run to 2,300-2,350 for the index and the bulls are making it look easy.
We continue to talk about this “range” the market has been in and we said there is the possibility of “overshooting” these ranges just a hair. It happened in June and you can see in the charts from Sunday’s Weekly Wrap how both the S&P 500 and Nasdaq traded just slightly above their 200-day MA’s and then fell hard.
It’s easy to be bullish right now, and even some of the bears are starting to crack. Truth is it is okay to be bullish right now, but make sure you have your eyes on the exit door. We could see smooth sailing for the rest of the week as the bulls look determined to test the upper end of the ranges we have listed, but the volatility will get insane. We do know that.
As we head to press, Dow futures are up 57 points to 10,514 while the S&P 500 futures are higher by 7 points to 1,116. The Nasdaq 100 futures are advancing 11 points to 1,898. Subscribers, check the Members Area for the important updates.
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