"You have to like the resiliency of Mr. Market here," said
Schaeffer's Senior Technical Strategist Ryan Detrick, CMT,
following a bounce-back that saw the Dow nearly get back all the
losses suffered the day before. "After the worst day of the
calendar year, it bounces back with more big gains just as quickly.
Everyone knows the market is overbought, yet it isn't giving
participants much of a chance to enter."
Continue reading for more on today's market, including
- Why our Senior Technical Strategist Ryan Detrick says the
current stock rally is
NOT being funded
"because money left bonds" and why he's "calling BS."
- A chart by our Senior Options Strategist Tony Venosa, CMT,
that shows why Bank of America (
a good candidate
for a long-term bullish trade.
- Why a bearish stance on pharmaceutical maker Merck & Co.
) could be
a good contrarian play
- The market regains lost ground, the budget fix proposed by
the White House, and how another video game release is helping
Electronic Arts (
With the White House offering a short-term budget fix and some
good news emerging on housing prices, the bulls were back after a
one-day absence as the
Dow Jones Industrial Average (DJI)
recouped most of the losses taken the previous day. The Dow
finished at 13,979.30, gaining 99 points, or 0.7%, and traded north
of 14,000 for much of the afternoon before settling back near the
bell. In a near reversal from Monday, all but two companies
advanced on the 30-member Dow, led by UnitedHealth Group (
), which jumped 3.6%. International Business Machines (
) was the largest decliner, falling nearly 0.5%.
S&P 500 Index (SPX)
also rose, gaining almost 16 points, or 1%, to close at 1,511.29.
The index regained its foothold above 1,500 -- the sixth time in
the last eight sessions it has closed there -- and touched a new
five-year peak of 1,514.96 in intraday action. The
Nasdaq Composite (COMP)
gained 40 points, or 1.3%, to finish at 3,171.59.
A Trader's Take
"Europe was the reason for the drop yesterday, now they are
getting credit for the bounce today," Detrick said. "All I know is
we've had a great run and lots of traders are getting itchy trigger
fingers to pick a top."
3 Things to Know About Today's Market
- President Obama proposed
a short-term budget
aimed at lowering the deficit and spending while restructuring
taxes, in an effort to stave off the automatic tax increases and
spending cuts -- known as the "sequester" -- scheduled for March
(The Washington Post)
- Computer maker Dell Inc. (DELL) officially agreed to
a proposed $24 billion deal
to take the company private --and chairman and CEO Michael Dell
will remain at the helm after kicking in his stake of 14%.
(The New York Times)
- Home prices are
on the rise
, with levels up 8.3% in December as compared with the same month
in the previous year.
5 Stocks We Were Watching Today
- The launch of the latest edition of the Dead Space video game
saga helped Electronic Arts (
draw in bullish traders
- The possible merger featuring British telecom/entertainment
firm Virgin Media (VMED) also
attracted a lot of bullish traders
- A recent technical bounce by Hewlett-Packard (HPQ)
- The Walt Disney Company's (DIS) impending earnings release
led to a lot of optimistic trades
- Department store chain J.C. Penney Company's (JCP) legal
issues led to a
bet on volatility
For a look at today's options movers and commodities
activity, head to page 2.
Crude futures closed higher, bolstered by stronger-than-forecast
data on the U.S. services sector. Oil for March delivery added 47
cents, or 0.5%, to end at $96.64 per barrel. Meanwhile, gold
futures fell, with positive economic news from the U.S. and Europe
diminishing the metal's safe-haven appeal. Gold for April delivery
gave up $2.90, or 0.2%, to close at $1,673.50 per ounce.
At the end of every market day, the staff at Schaeffer's
Investment Research reviews the trading day in detail, covering
major events and key market developments. Don't miss this
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