Yesterday the market was sharply higher in early trading, and I said I don't like to see the market too strong, too early. Sure enough, by the close the entire rally had faded and the market actually closed down for the day.
This morning, the markets are sharply higher once again in the first hour. Let's just hope we don't have a repeat performance of yesterday's late fade.
The big catalyst this morning is comments out of China that they have denied that they are reviewing their European debt holdings. Yesterday's late day weakness was attributed to a story that China was "looking" at its European debt holdings, and that caused the euro to tank.
The news is boosting the euro, which in turn is weighing on the dollar. Nonetheless, oil is higher again, nearing $73.50, while gold is steady around $1212.
All 10 S&P sectors are higher, led by energy and financials. Real estate is strong also (IYR), and emerging mkt etfs are getting a nice boost.
The second estimate for Q1 GDP showed the economy's growth rate moderating from the initial estimate of 3.2% to 3.0% this time.
Asian markets were higher overnight; the 10-year yield has bounced all the way back to 3.34%; and the VIX is back down to the 30 level. Let's hope it doesn't reverse higher again.
Trading comment: The VIX is down -13% today, a good sign. And the euro is higher. If the euro can stabilize here, it should leave the window open for stocks to continue to work higher. The recent extreme readings in the put/call ratio often coincide with at least a trading bottom. But I will continue to look to make partial sales on strong days to maintain flexibility.
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