The indices had a very strong rally today after a very weak opening and an early sharp drop. They turned around on a dime, with financials leading the way.
Most of that was attributed to a positive outlook by Meredith Whitney, leading bank analyst, who said she was bullish on Goldman Sachs (GS) and thought Bank of America (BAC) was the cheapest bank out there.

The triggered a strong move in the financials, and a very strong reversal rally in the market.

The Nasdaq 100 reversed from 1402 to close at 1447.70, near the highs for the day going away, up 27.86. The S&P 500 jumped from 875 to over 900, closing at 901.05, up 21.92. The Dow jumped from 8130 to 8330, a 200-point move, up 185 on the day.

It was a significant day for the indices as two layers of overhead resistance were taken out, and half of the entire drop for the last 4 sessions was taken back in just one day.

The technicals supported today's move. Advance-declines were about 5 to 1 positive on New York and about 19 1/2 to 7 on Nasdaq. Up/down volume was 10 to 1 positive on New York on total volume of about 1.2 billion. Nasdaq traded about 1.9 billion and had a 6 1/2 to 1 positive volume ratio.

TheTechTrader.com board was mostly higher, but there were several fractional losers.

Leading the way on the plus side was Goldman Sachs (GS) up 7.57 at 149.44, JP Morgan (JPM) up 2.37 to 34.71, Morgan Stanley (MS) up 1.97 to 27.91, Wells Fargo (WFC) up 1.93 to 24.80, and Bank of America (BAC) up 1.11 at 12.99.

Other gainers included the OIH oil services ETF, which reversed sharply from under 89 this morning to close at 93.18, up 1.41. The Direxion Financial Bull 3x Shares (FAS) was up 6.35 to 43.81.

On the downside, the Direxion Financial Bear 3x Shares (FAZ) led the way, down 9.62 to 46.73. The Direxion Large Cap Bear 3X Shares (BGZ) lost 2.89 to 37.17, the UltraShort Real Estate ProShares (SRS) 1.83 to 20.92, and the the Direxion Small Cap 3x Bear (TZA) also 1.83 to 24.48.

Stepping back and reviewing the hourly chart patterns, sharply lower early on, and then a very sharp reversal, with the banks leading the way, and then a more muted advance in the afternoon but a steady one, holding support all session and closing at highs for the day going away. The bulls couldn't have asked for more. Well see what kind of extension they get tomorrow.

Good trading!

Harry

For more of Harry Boxer, sign up for a FREE 15-Day Trial to his Real-Time Technical Trading Diary. Or sign up for a Free 30-Day Trial to his Top Charts of the Week service.

(c) 2009 AdviceTrade, Inc. All rights reserved. Distributed only by written permission of AdviceTrade and The Technical Trader at info@advicetrade.com . In using any portion of Harry Boxer's content, you agree to the terms and conditions governing the use of the service as described in our disclaimer at http://www.thetechtrader.com

Mr. Boxer's commentaries and index analysis represent his own opinions and should not be relied upon for purposes of effecting securities transactions or other investing strategies, nor should they be construed as an offer or solicitation of an offer to sell or buy any security. You should not interpret Mr. Boxer's opinions as constituting investment advice. Trades mentioned on the site are hypothetical, not actual, positions.

Harry Boxer Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.