Israel has said it may increase its assault on the Gaza strip, and that has oil rallying another $2 to $89. But that has not derailed the rally in stocks so far this morning. One thing that concerns me a bit is that I never like to see very strong opens as that leaves a lot of time during the trading session for sellers to emerge knock down the market. I prefer to see stocks rally into the close like they did on Friday.
In economic news we got some more positive housing data. Existing home sales for October rose to 4.79 million from 4.69 million last month. And the NAHB Housing index for November rose from 41 last month to 46 this month. Both readings were above consensus.
Overnight markets in Asia were higher. Japan led with a 1.4% gain and China lagged with 0.1% rise as news came out that China saw housing prices decline in 17 of 22 major cities last month.
European markets are also higher today despite a member of the ECB saying Greece will be unable to return to public markets in 2015-16 and will likely need more aid.
The dollar is lower today and helping to boost commodities. Oil is up past $89, aided by the escalating Israel conflict. Gold prices are higher to $1733. And silver and copper prices are higher as well.
The 10-year yield is higher to 1.61%. And the VIX is down -3.7% today back below its 50-day average to 15.80.
Trading comment: Last week I commented that the Nazz had been down 6 straight weeks and was overdue for a bounce. We started to add some QQQ on Friday to trading accounts and I was looking to add to it today but with the markets up as much as they are this morning I don't want to chase and overpay. If we get an intraday dip I will likely add some as I still think the markets could see further upside this week. The market is very short-term oversold and investor sentiment had recently become pretty bearish. So that should provide a backdrop for more than just a one-day bounce.
KAM Advisors has long positions in QQQ
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