Dow Rockets 287 Points; Rumors Call Bulls Back to the Street

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"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 du jour 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:

  • Is it time to "buy the rumor" about another round of quantitative easing?
  • Is the SPX bouncing from a major low , or preparing for another downturn ?
  • Plus, check out some charts with Bernie Schaeffer.
And now, a look at the numbers...

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

The 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% increase.

The 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%.

The 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.

Today's highlight : "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 bear trap . This occurs as bearish investors get a little too excited and find themselves trapped near the lows, only to see the market rip higher."

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

OUTPERFORMING AND UNDERPERFORMING SECTORS

STOCKS - MOVERS

STOCKS - EARNINGS

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

For today's notable annual highs and lows, click here .

SCHAEFFER'S MARKET POSTURE

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 critical, timely and insightful report. If you enjoyed today's edition of Market Recap, sign up here for free daily delivery straight to your inbox.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Options

Referenced Stocks: CBK , GRPN , LNKD , PCLN , ULTA

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