Overnight, People's Bank of China said rate hikes could be months away. This helped boost Asian markets. In Greece, the country received a deal on its sovereign debt crisis, which is backed by the IMF and eurozone and funds can be tapped if the country is unable to raise funds on its own.
This news boosted the euro at the expense of the dollar. But commodities prices aren't down that much, with oil trading near $80.40 and gold hovering around $1092.
In economic news, Q4 GDP was revised slightly lower vs. earlier projections, coming in at +5.6% vs. 5.9% previously. Also, the House is expected to announce an expansion of its foreclosure -prevention efforts. Under this plan, FHA will allow some borrowers who are underwater to refinance into govt.-backed loans.
The 10-year yield is lower to 3.86%; and the VIX is down -3.9% to 17.68 after yesterday's spike above its downtrending 50-day average.
Among sector ETFs, materails are leading the way (+1.35%) followed by financials (+1.19%). Healthcare is lagging (-0.34%). In the subsectors, homebuilders are strong (+1.67%) as are steel stocks (+1.87%) and emerging market etfs.
Trading comment: The chart below shows an interesting phenomenon. I have said that the market doesn't always have to pullback to relieve an overbought condition. Lately, the Nasdaq has been climbing higher, albeit it in a choppy fashion. This chopping and flopping around has given the oscillator time to pull back from its overbought levels, and this puts the market in better shape to rally going forward.
There are obviously more indicators and factors to take into account than this, but this is one of the things I watch so I wanted to point it out. The other is the put/call ratios, which have not been showing too much complacency lately. So the above items, coupled with the fact that we are approaching quarter-end, keep me bullish at this juncture.
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