Although Asia's markets were roughly flat overnight, Europe is rallying this morning. The euro is also getting a boost at the expense of the dollar. China was closed all last week for holidays and re-opened with a -0.6% loss last night.
Commodities are rallying, with gold prices higher to $1667 and oil prices up near $86.
All 10 S&P sectors are higher today, led by energy and financials. Defensive sectors like consumer staples and utilities are lagging.
The bond market is closed for Columbus Day today.
Trading comment: A notable development on the technical front is the S&P 500 breaking above its overhead 50-day average for the first time since July. Lots of traders like to lean short on stocks when the market is below this key moving average. While one day doesn't necessarily change the trend, it is a good start. And a couple consecutive closes above the 50-day could spur additional short-covering. The SPX has been down for 5 straight months, so a relief rally certainly isn't out of the question.
Earnings season will start to pick up soon, and will be a key ingredient. Stocks have already priced in a lot of negativity, and in my opinion have priced in a decline in corporate profits going forward. If we can get some solid reports and forward guidance from managements that is less bearish than many already fear, I think that could be enough to add to this nascent rally.
still long SH
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