1:05pm (EST)
Futures were strong throughout the night and into this morning which lead to a sharply higher open. The bounce off yesterday’s lows was impressive by the bulls and they are using that late-day momentum to push resistance again. Much of the rebound involves overseas news and Germany which rejected lawsuits aimed at blocking the country’s participation in bailout packages for Greece and other euro zone countries. This has helped sooth fears of a euro collapse.
There is also renewed hope that President Obama is going to say something to spur job growth but guess what? It will cost money. According to the talking heads, Obama plans to unveil a $300 billion package to create new jobs but expect the Republicans to balk at more spending as any plan would need to be approved by Congress.
We aren’t sure if Bank of America (BAC, $7.41, up $0.42) is getting the memo as job creation is expected to come by corporate tax breaks but they are slashing 10,000 jobs. Other big corporations have also been cutting back jobs so this could be another losing battle or one that offsets those cutbacks.
Of course, what the President says and his plan of attack will either help or hurt the market as we remain in a trading range that has been forming since August. We could still go either way, meaning the market could test new lows or the bulls could make a run back towards upper resistance.
In other words, we could see a breakout or breakdown real soon.
We will be back in the morning with a full update as we need to cut it short so that we can check on our trades. Some of our CALL options are getting a nice pop today so let’s go see where we are at.
As we head to press, the Dow is up 204 points to 11,343 and just below our 11,350 target. The S&P 500 is higher by 26 points to 1,191 and is still looking to crack 1,200 while the Nasdaq is back over 2,500 and is showing a gain of 57 points to 2,531.
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