At Least For Today, It Doesn’t Get Any Better Than This
The markets opened higher Monday as
the markets were extremely oversold.
The markets made a technical bounce
and squeezed the shorts in the session, driving the markets up. In last week’s
session we experienced a confluence of events, the CBOE Volatility Index
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patterns on sectors and major indexes both here and abroad all pointed to a
potential bottom.
Another indicator to add to our
quiver, in this week’s Barron’s, the cover story is titled ” It’s Time To Buy
Stocks,” from a periodical that has typically taken a bearish stance in the
past. According to the article in the paper, stocks are
“undervalued” based on the “Fed Model” which
incorporates the 10 year Treasury Note Yield compared to the collective earnings
yield of the stocks that make up the S&P 500 index. Is this any indication
that the bear has turned? As I said on Friday, the ingredients are there, now
let’s see if the mix can make the market rise.
Breadth for the day was positive. NYSE
advancers led decliners 2398 to 817 and the Nasdaq advancers beat out decliners
2355 to 869.
The CBOE Volatility Index
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closed lower 14.3% and the Nasdaq 100 Volatility Index
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lower 13.8%.
The broader markets all moved higher.
The Nasdaq Composite climbed 5.3% and the Dow Jones Industrials closed higher
4.4%. The Dow’s point gain was the fifth largest for the index. Volume came back into the markets in the
session, one of the top 10 days in volume for the NYSE.
Sectors moving in the green were the
Airline Index
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was signing a $15 billion bailout package this weekend.
The Interactive Week Internet Index
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moved up 6.4%. The GSTI Internet Index
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And the Chemical Index
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closed higher 7.0%.
There were a few sectors in the red,
the Oil Services Sector
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The Gold and Silver Index
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fell 3.2%, which was inevitable since the index became overbought.
And the Oil Index
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3.1%.
Individual percentage gainers were
Galileo International
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approved the merger between GLC and Cendent
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Ace Limited
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Skywest
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the airline bailout news.
Digital Insight
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scooted higher 32.1%.
Losing ground was Dollar General
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which slid 23.8%
Ocean Energy
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the global drop of crude oil prices.
On the Nasdaq, Vertex Pharmaceuticals
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suspended its trials of VX-745, a promising experimental arthritis drug, on
issues that it had some neurological side effects in animals to which high doses
were
administered.
Charter Communications
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fell 19.9% after the company’s Chief Executive Officer, Jerry Kent, resigned to
pursue his “entrepreneurial instincts.”