"Rumors...it's all about the rumors. Although unsettling, it
seems unsubstantiated gossip has had a greater and greater impact
on investors. Hence, the rumor
that some type of stimulus is coming soon," remarked Schaeffer's
Senior Technical Strategist Ryan Detrick. "With the recent drop-off
in economic growth, feelings are that something is coming rather
soon to get the economy back on the right track." With that, the
Dow Jones Industrial Average (DJI)
made a decided charge north, and reclaimed its perch atop its
200-day moving average.
Keep reading to see what else was on our radar today:
And now, a look at the numbers...
- Is it time to
"buy the rumor"
about another round of quantitative easing?
- Is the SPX
bouncing from a major low
preparing for another downturn
check out some charts
with Bernie Schaeffer.
Dow Jones Industrial Average (DJI - 12,414.79)
marked its best performance of the year today, rocketing 286.8
points, or 2.4%. The blue-chip barometer jumped from an
early-session low of 12,125 all the way to a session high (and
daily close) of 12,414.79. All 30 components finished with wins as
Bank of American was the biggest gainer, posting a 7.6%
S&P 500 Index (SPX - 1,315.13)
rallied 29.6 points, or 2.3%, by the closing bell, while the
Nasdaq Composite (COMP - 2,844.72)
surged 66.6 points, or 2.4%.
CBOE Market Volatility Index (VIX - 22.16)
recorded a third straight loss today, lopping off 10.2%. The VIX
closed above its session low of 21.80, but ended below its 20-day
trendline for the first time since May 3.
: "The fact that we had a big bounce is always nice, but volume
wasn't much to write home about. So, you have to consider that as a
potential warning," Detrick observed. "Nonetheless, the SPX quickly
reclaimed its 200-day moving average
, which could be good signal."
"In fact," Detrick continued, "the bears grew rather vocal on
this violation, and they could now be facing what's called a
. This occurs as bearish investors get a little too excited and
find themselves trapped near the lows, only to see the market rip
Turning to today's major market stories...
For today's activity in commodities, options, and more, head
to page 2.
Oil futures notched a third consecutive win today, catching a
lift from the
European Central Bank's (ECB)
actions to control ongoing euro-zone financial woes as well as a
faltering greenback. However, a smaller-than-expected drop in crude
stockpiles kept the commodity from rising too high. Crude for July
delivery added 73 cents, or 0.9%, to close at $85.02 a barrel.
Gold futures were also positively impacted by news out of the
euro zone and the weakening dollar. August-dated gold jumped
$17.30, or 1.1%, to land at $1,634.20 an ounce -- its highest
settlement since May 7.
Levels to Watch in Trading
- Dow Jones Industrial Average (DJI - 12,414.79) - support at
11,500; resistance at 14,000
- S&P 500 Index (SPX - 1,315.13) - support at 1,100;
resistance at 1,500
- Nasdaq Composite (COMP - 2,844.72) - support at 2,400;
resistance at 3,400
For today's notable annual highs and lows,
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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