The bulls opened the regular session on a positive note by running up the overnight futures creating a strong gap up in the three major indexes. A stellar Existing Homes Sales number released at was enough to give the markets a short boost but not enough to draw in the interest needed to continue the rally as the markets subsequently rolled over. In the first 90 minutes the Dow was able to print fresh highs not seen since October 2008. The S&P 500 and Nasdaq were not able to print new highs for 2009 but still benefited from the brief holiday week rally by gapping higher. However, the major indexes remained soft throughout most of the remaining session by drifting lower only to bounce in the last hour and finish near the middle of their daily ranges. Partially to blame for lack of follow through is the fact many market players are heading for the exits to start the holiday week.
In other market indicators: the CBOE Volatility Index (VIX) broke to new lows on the heals of market strength; the US dollar continues to base at lows; Gold and silver continue to show strength; Oil closed down near the base of a month long consolidation.
On the bigger picture the Dow and S&P 500 continues to base near the Fibonacci 50% retracement level created by the October 2007 high to the March 2009 low swing and the Nasdaq continues to hover near it’s Fibonacci 62% retracement level.
Tomorrow’s Watch
Economic News
The GDP is scheduled for release before market open and the FOMC meeting minutes is scheduled for Either release has the potential to make a significant impact on market direction.
Earning Releases
A partial list of companies scheduled to release earnings before tomorrow’s open: ADI, HPQ, CPB, BRCD, BKS, MDT, HRL. For a more complete list click here.
The Charts
The adage, “A rising tide floats all boats” certainly has merit and a quick look at stocks currently exhibiting good relative strength will illustrate the potential should the markets continue to trend. A few examples follow:
Apple Inc. (AAPL)
Amazon.com Inc. (AMZN)
Baidu (BIDU)
Freeport-McMoRah Copper & Gold (FDX)
FedEx Corp (FCX)
Hewlett-Packard (HPQ)
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