Rampant optimism spikes the market
Index & Sector performance 10/10/13
The Market:
In case you were under a rock today. The market exploded to the upside. The move seemed help by some uncertainty being out of the way including the past news that Janey Yellen would be the new Fed chair and confirmation from the FOMC minutes that tapering will not likely start until the end of the year (or later). To add on there was optimism out of Washington about a debt deal.
In economic news, Unemployment claims came in far worse than expected posting a 374K when 307K was expected. The reason the market was quick to shrug it off was reports that the government shutdown and a computer change in California were culprits. Traders seemed willing to accept the number as an outlier. Tomorrow there is Consumer Sentiment, Inflation Expectations and some fed speak.
Story Stocks:
Vonage (VG) gained over 16% on the day after announcing they will purchase Vocalocity for $130M in cash and stock
Finding stocks up today was easy but two down on such a strong day were Ruby Tuesday (RT) and Citrix Systems (CTXS). Both stocks provided earnings which disappointed the street. RT closed down 17.09% and CTXS lost 11.87%.
The following noteworthy companies are scheduled to report earnings before tomorrow’s open: JPM, WFC, WBS
Analyst Comments:
Upgrades 10/10/13
Downgrades 10/10/13
Initiations 10/10/13
Price Target Changes 10/10/13
The Game Plan:
Days like today can make you kick yourself if you not long and if your long make you wish you were longer. The rally seemed to defy gravity closing at highs for the day and just below the 20 day SMA. Tomorrows action will be very telling. Can we hold these strong gains? The MACD is still lagging on the daily but it is trying to turn up. Possibly not quite this strong in one day recently but we have seen one and two day strong rallies that ultimately consolidated or even went lower before the low was in. Traders should remain nimble and longs should want to see $1670 and definitely $1660 hold. If those levels do hold then the door has to be opened to the fact that the swing lows are in and we could be poised for much higher.
