The market continued to rally for the second, straight day. This morning, JPM beat the estimates with its earnings and saw its shares gap-up at the open. JPM shares ended +13.52% higher. GS and MA both kept going higher, adding +4.85% and +5.46%, repectively. The financial sector was strong as a whole, again. XLF managed to close above $20, at $20.26.
Overall, commodities-related sectors were very weak. USO fell another 3.41%, as the crude went below $130/barrel. Energy stocks also dropped, led by HK, falling 15.28%. Coals were very weak: PCX -14.52%, ANR -8.7%, CNX -9.11%, MEE -9.91%, ACI -8.5%, and BTU -8.98%. Steels also tumbled: CLF -6.51% and X -5.73%. Even agriculture stocks reversed early gains to end largely negative: MOS -6.49%, CF -3.79%, and POT -4.36%.
The techs were strong, led by biotechs and semiconductors. But, after the market, GOOG reported earnings that missed the estimates, although it showed a +35% growth! GOOG shares fell 7.63% in AH trading. MSFT announced a 4Q profit that jumped +42%, but, missed the estimates by 1 penny. Its shares traded 6% lower after the report.
The Dow ended higher by +207.38 points; SPX added +14.96 points; Nasdaq gained +27.45 points:
VIX went below 25 intraday and closed just above, at 25.01. SOX (semiconductors), BTK (biotechs), and SWH (software) were all in the green. XLF (financials) added +4.33% while HGX (housing) rose +4.52%. XME (metals and mining) tumbled 6.13%. UNG (natural gas) dropped 7.01%. DBA (agricultural commodities) fell 4.67%. FXI (Chinese ADRs) advanced +0.96%.
SPX
SPX added +14.96 points to close at 1260.32. It closed above the 10-day MA, which flattened. Its MACD went higher and made a “bullish crossover” (see video from this weekend).
Nasdaq
Nasdaq gained +27.45 points to close at 2312.3. It closed above its 20-day MA and the 10-day MA has turned up! Its MACD difference (bluebars) went positive.
So, the market has made the MACD bullish turnover that I was looking for this weekend. But, in 2 days, the market has recovered quite a bit of distance. With GOOG and MSFT missing their earnings, I think they will be good excuses for the market to lock in some profits tomorrow, especially being just before the weekend. The energy and metals sectors have come down much. These may find some buyers tomorrow, although I don’t think these sectors are quite done going down yet. Both SPX and Nasdaq have gone above their 10-day MAs (Nasdaq actually closed above its 20-day MA), and the 10-day MAs have begun to turn up. What the market needs to do tomorrow is to keep above the 10-day MA and look to continue the recovery process next week.
Good night and HappyTrading!
