Tuesday, June 26, 2007

Another Bounce At The Open

The markets are getting a lift in early trading. Oil is down nearly a buck to $68, and bond yields are steady with the 10-year around 5.08%. There was also another slew of M&A activity announced this morning (what happened to the weekend?).

This time, it is large European companies doing the buying. Roche is launching a hostile bid for VMSI, sending that stock +44% higher. HUN and EAS are also being bid for.

Yesterday was clearly disappointing. You have heard me say many times that I am distrustful of a market that rallies strong early in the session. That kind of setup often leaves the market vulnerable to a late day selloff.

So today, I would prefer to see the market just mull around for the morning, and then build strength into the close. I think financials will be the "tell" for the day. I am keeping an eye on Goldman Sachs (GS) and Bear Stearns (BSC).

But I still believe quarter-end will begin to influence buyers and the markets will finish the week higher.


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