Last week the market pulled back for 3 days before bouncing on Friday. Today it is extending that bounce with the S&P 500 right back at its highs for the year. This week marks the last week of Q1 and portfolio managers who have been underinvested likely used the brief pullback as an opportunity to put more cash to work.
There isn't a lot of market moving news this morning. Fed Chairman Bernanke made some comments that job market conditions remain slack, which lends itself to the notion that the Fed will remain accomodative. This echoes comments made by other Fed officials last week.
Pending home sales for February fell -0.5% vs. a gain that was expected. But that has done little to stall this mornings rally.
Asian markets were relatively flat overnight, and Europe is higher this morning except for Spain which is selling off on budgetary concerns. If Spain flares up the way Greece did, it would likely be problematic for the markets.
The euro is also getting a bounce, and the weaker dollar is helping boost commodities. Oil prices are higher near $107, and natural gas prices are higher also. Gold prices are also bouncing to $1685, and silver and copper prices are up as well.
The 10-year yield is higher at 2.28%. Interestingly, the VIX isn't lower on today's rally and is holding in at 14.95. Recent VIX action has been somewhat perplexing and our higher volatility trade hasn't worked out.
Trading comment: Buyers are back in control today. I usually don't like to see a market that is up strong at the open. I prefer to see the market build its strength later in the day and close at its highs. These up opens leave to much time for sellers to step in knock the market back down, but we will have to see if buyers stay in there right into the close. Leading growth stocks continue to pace the market, and even though AAPL has taken a bit of a rest, PCLN remains on fire, as do ALXN, RAX, SWI, CHKP, the cloud stocks and a host of other.
KAM Advisors has long positions in AAPL, ALXN, CHKP, PCLN, and RAX
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