The market enjoyed a big rally today pushing the Dow Industrials above the 10,600 mark and moving the other major indexes up near their highs for the year. Notice I said “near their highs for the year”, not to new highs for the year. It seems there is exceptional bullishness backed up only by stocks nearing their highs made this summer. Plus, the market is in the over bought territory tonight. The volume was better than average but not as much as we saw last week. Many technical indicators in today’s market were just not what you would like to see for a good start to an up move.
We have said that the market will make a new low for the move during this month and today’s rally helps destroy that theory. We don’t want to be stupid about staying in our positions but our indicators are over bought and not as strong as we have seen.
The news for consumption really isn’t that good either. Today we saw a new world record trade deficit around $66 billion for the month. GM hit a 23 year price low today. Delta Airlines reported a $1.13 billion loss. The tech group’s darlings CSCO and DELL have basically fallen down and they can’t get up even in a market like today.
But, INTC saved the day today by announcing an increase in their dividend and a $25 billion stock buy back. One of my reads tonight said that INTC only has $12 billion in cash so there might be a windfall somewhere. The lottery is only at $25 million for Saturday night. The article also mentioned that their cash position dropped from last quarter to this quarter so that windfall better hurry up. Of course, company buy backs that are announced in advance don’t Have to happen either.
The University of Michigan Consumer Sentiment Index did improve and was above expectations. The bonds had a good day today but that isn’t necessarily good news for the stock market. The bonds are in a fairly strong down channel that I have hoped would be broken to the upside for a short upside run. Today just gets them back to the top of the channel. We would need to see a bit of a breakout from here to feel like a good strong rally was in the making. (Refresher, down channel means that the bonds are in a little downward sloping zigzag pattern. The breakout would mean the down channel was broken and the bonds could move up. If bonds move up, then rates move down. Got that?)
Friday is Veteran’s Day and the banks are not open so the bond market is not open either. The stock market is open but without bonds trading and with banks closed, trading should be subdued. We are looking for a calm day on Friday and will report any new information on Sunday evening. Have a good weekend.
Dow Industrials: 10,640.10 +93.89
RYVNX: 19.46
TLT: 89.44
BGEIX: 12.64
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