The markets added to yesterday’s gains closing up modestly. With the S&P500′s close today, it has now entered a key resistance range. Its current level coincides with the recent rally SPX staged between 8/12 – 8/17. During that rally, the lows for SPX ranged between 1,170 – 1,185. Be it that the index then broke down out of that range and traded back towards 1,120 before again bouncing, technical analysis says there should be trapped supply around those levels that would be looking to sell on any rally back up to those levels. We’ll be watching to see how SPX reacts to entering during tomorrow’s trading.
What was interesting to us today was the sector performance between technology and financials. Yesterday we saw technology lead the charge higher, with stocks like AMZN, AAPL, CRM, BIDU, & GOOG all post strong % moves for the day. Today, those stocks and the sector seemed to struggle advancing higher (NASDAQ was the only index failing to close up 1%+ on the day), while the financial sector led the markets higher. Bank of America (BAC) buoyed the sector, surging 9% on what we attribute to bargain hunting and a bounce out of technically oversold levels. Personally, if you were making a bullish argument for the markets here we would prefer to see these two sectors both perform well at the same time, as opposed to taking turns, as we think it would lend greater stability to the overall market.
Also something of note today was the huge drop in gold, which suffered its biggest one day price drop since August 2008. We think some of today’s rally had to do with the fact that big money was reallocating money out of gold and into equities, providing extra fire power to the rally. Gold should be monitored as when it starts to catch a bid again it could be a sign that this recent rally in equities is nearing a peak.
NNAN, EMBA, & OPSY were big winners for members today. NNAN, alerted @ $0.0025 in our chat room on news rallied to over $0.006 for gains of 150%. OPSY, saw activity late in the day rallying from $0.003 to close over a penny and looking like it might continue tomorrow. Watch $0.0075-$0.01 for support on OPSY in the coming days, with resistance @ $0.015, and then $0.02. EMBA meanwhile continues to impress from our original email alert in the $0.30′s last week. The stock has now returned members well over 50% and looks poised to continue its bullish move at the open tomorrow. After the move its made though, we always advise members to be lock in some profit to at least protect principle.
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