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Dow Adds 85, SPX Highest Since Early April as Bulls Lead a Sleepy Street

By: Schaeffer's Investment Research
Posted: 8/16/2012 4:39:00 PM
Referenced Stocks: ADBE;CBS;CSCO;KFT;WMT

"It's undoubtedly clear that the past week and a half has been pretty unexciting," said Schaeffer's Senior Technical Strategist Ryan Detrick. "But after today, everyone is scratching their heads as to why exactly we just rallied. The reason can be found in some words of wisdom that are older than most of us reading this: never short a dull market." Today's upswing pushed the Dow Jones Industrial Average (DJI) decidedly higher today; at its intraday peak, the blue-chip barometer was up more than 104 points.

Keep reading to see what else was on our radar today:

And now, a look at the numbers...

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

The Dow Jones Industrial Average (DJI - 13,250.11) soared as high as 13,269.35 today -- its best price in three months. By the closing bell, the Dow pared its gain slightly, and ended the session up 85.3 points, or roughly 0.7%. This marked the index's loftiest daily settlement since May 2. Twenty-three of the 30 components posted wins, with a 9.6% earnings-induced rise for Cisco Systems, Inc. ( CSCO ) leading the way. On the other hand, Wal-Mart Stores, Inc. ( WMT ) paced the underperforming issues with a 3.1% loss. Kraft Foods Inc ( KFT ) remained at breakeven.

The S&P 500 Index (SPX - 1,415.51) and Nasdaq Composite (COMP - 3,062.39) also advanced in today's action. While the SPX turned in a roughly 10-point, or 0.7%, uptick, the tech-rich COMP rocketed 31.5 points, or 1%. This was the highest daily close for the SPX since April 2, and the COMP's best daily perch since April 27.

The CBOE Market Volatility Index (VIX - 14.29) pulled back 2.3% today, finding a foothold just above its intraday low of 14.28. This makes five consecutive sessions underneath the 15 mark for the VIX.

Today's highlight : "Housing stocks kicked some butt today, even though there was some disappointing housing data this morning," remarked Detrick. "We've been bullish on this group all year, and to see it shake off bad news is a very upbeat sign for the group -- maybe even the entire market as a whole."

Ryan continued: "Also, I love to see small caps lead. They've lagged most of the summer, but since August started they've taken the driver's seat. This is just one more sign that this rally could still have some legs."

Turning to today's major market stories...

For today's activity in commodities, options, and more, head to page 2.

Crude futures saw their third consecutive up day, as the dollar drifted lower and speculators mulled supply worries from the North Sea and heightened tensions in the Middle East. Even as the White House said it could soon revisit plans to release strategic oil reserves, oil for September delivery jumped $1.27, or 1.4%, to land at $95.60 a barrel. This marked the commodity's highest daily settlement since May 11.

Gold futures made it two wins in a row today, as comments from China's premier buoyed hopes for stimulus for the world's second-largest economy. Gains were limited, however, following a report from the World Gold Council that showed global demand for the precious metal dropped a year-over-year 7% in the second quarter. By the close, December-dated gold rose $12.60, or 0.8%, to settle at $1,619.20 an ounce.

Levels to watch in trading...

OUTPERFORMING AND UNDERPERFORMING SECTORS

STOCKS - MOVERS

STOCKS - EARNINGS

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Click through to read coverage of today's notable annual highs and lows .

SCHAEFFER'S MARKET POSTURE

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