Wow, what a day that was!
The markets were up on good, but not great volume, retracing half of December’s losses in one day.
It is amazing to me how certain market moving events are coincidental with charts. Yesterday the Dow went right down to the 50 dma of 10,700 and stayed there until 2 pm when the Fed minutes (which were no surprise at all) “caused” a significant bounce back up.
http://stockcharts.com/gallery/?djia
Nasdaq had a similar bounce:
http://stockcharts.com/gallery/?$COMPQ
If you look at the above chart you would say – “Oh sure, anyone could have seen that coming.” My concern is that a similar bounce occurred on 9/16 and was followed by one of the worst weeks of the year with a 300 pt drop in the next 3 days. There was only one session last quarter where a 100 pt rise went unpunished, that was November 28th which was the start of the 700 pt November rally.
I use the Dow not because it’s a good indicator but because it is a familiar one and the numbers are easy to relate to – the other indexes mainly followed suit. We talked about this rally yesterday and the biggest positive I saw was that Microsoft actually did lead the Nasdaq higher.
We will have to see what Wednesday’s action will bring before making any major plays as all these gains can evaporate by week’s end.
I am still staying mainly in cash and taking profits – especially when they are as large as they were yesterday – off the table.
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Our TOTD NGRU gained 6% for the day but was nowhere near the best pick we made. Another 6% and I am out of this stock, no sense waiting for the 17th.
All things that glitter and anything oily were the best trades yesterday – aside from our usual picks, a monkey could have picked winners with a dart board. ABX is still lagging the group. GG needs to be sold on any gold pullback as it is way ahead at the moment.
http://finance.yahoo.com/q/bc?t=1y&s=ABX&l=on&z=m&q=l&c=gg+nem+bvn
Our coal plays went well yesterday with BTU, FCL and ACI all posting 4% gains.
YELL had a heck of a last day under their old symbol and will enter Wednesday as YRCW, which will confuse people for a couple of days. As the stock is right under its 50 dma of $46, it will be critical to break above it with volume to confirm an uptrend. This will be hard with oil over $62.
MOT had the expected breakout and looks poised for a move up. Unlike many stocks, MOT was going up before 2pm.
