Well along comes Spain and out of the blue they hold a debt auction that was stronger than expected. That really improved sentiment in Europe, along with some solid sentiment surveys in Germany and the UK, and got the euro rallying. We know that lately if the euro is higher, the stock market is higher.
Asian markets were up slightly overnight, but Europe's markets are up nicely today. The Dow has spiked nearly 300 points so far. In economic news in the US, housing starts and building permits were both better than expected. Homebuilder stocks are rallying on the news.
In corporate news, General Mills (GIS) came up short of consensus estimates and its stocks is lower. CVS issued an in-line outlook and hiked its dividend by 30%. Its stock is nicely higher.
The dollar is lower, which is boosting commodities. Oil prices have spiked up to $97.25, while gold prices are back above $1600 near $1618. Silver and copper prices are higher also.
The 10-year yield is getting a big boost to 1.90%, which is still a pretty low yield overall. And the VIX is down sharply again, falling more than 9% so far. The VIX is currently at 22.60 and if it closed at these levels it would be the lowest reading since late July.
Trading comment: It didn't feel very good to do some buying yesterday, but I feel much better about it today, lol. The SPX had been turned down by its overhead 50-day average the last few times. At the time, I said that I felt that was normal and that after a pullback and some consolidation we could see a successful move above that key moving average. So far today the SPX has broken above its 50-day which was at 1230. A solid close above that level should embolden bulls to do more buying and bears to cover shorts. We are still long are trading positions in SCSS, TSCO, ULTA, and STMP. We also added some IWM yesterday to add overall exposure.
KAM Advisors has long positions in all stocks mentioned
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