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Thursday, March 28, 2024

Stock Market Rallies On Rumors (SPY, DIA, GLD, USO, IWM, QQQ)

Courtesy of John Nyaradi.

Global stock markets rally on rumors and into resistance.

Global stock market indexes put on an impressive rally today, but it seemed to be mostly fueled by rumors from Europe and the price uptick stopped short of significant resistance.

All sorts of rumors are flying around Europe about an expanded credit bailout for Greece (or not) depending upon whom you are hearing.

Much like last week when China was reportedly going to save Europe, this week’s news centers on “coordinated” action between the European Central Bank and member nations.  This will be like trying to get two Europeans to agree on where to eat.  It just won’t happen.

The Dow Jones Industrials (DIA) rallied hard from the open as Industrials took off in the futures market and stayed higher most of the day.

Other major indexes like the S&P 500 (SPY) and Nasdaq (QQQ) followed suit and added to the overall lustre of the market.

Gold (GLD) resumed its winning ways.

But the whole thing stopped at major resistance on the S&P 500 which lies at roughly the 1200 level with a bearish mass that will be a challenge for bulls to break if they want to move this market higher. After touching 1195 on the S&P 500, the index slid backwards to close at 1175, smack in the heart of major resistance.

An article in the Financial Times threw cold water on the “Greece is good” story when it mentioned the inconvenient fact that as many as seven of the seventeen Euro nations want bigger “haircuts” for private bond holders when the Greek debt takes its seemingly inevitable writedown.  Also, it seems to be growing more apparent minute by minute that Greece needs more aid than was thought just a few months ago.

However, the Greek Prime Minister, George Papandreou, steadfastly claims that Greece will make all its commitments due to the “superhuman” effort being mounted by his countrymen.  Of course, they’re rioting in the streets on most nights, but we’ll overlook that inconvenient fact for now.

Economic news was fairly glum today as reported in Economic Reports and tomorrow brings the August Durable Goods report.

Stock Market Wrap:

Dow Jones Industrials: (DIA)  +136; +12%

NASDAQ: (QQQ)                             +27.6; +1.1%

S&P 500: (SPY)                                +11.4; +0.9%

Russell 2000: (IWM)                     +13.8; +2.1%

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