Market Bounces From 50-Day Averages
Yesterday I commented that the major averages had come down to test support at their 50-day averages. So far, that support has held and the indexes are bouncing from those levels. The question is will the bounce last, or is it just an oversold rally?
There were some solid earnings reports that are boosting related stocks today, including the likes of DELL, ADI, and Abercrombie (ANF). One report that looked good but is not helping the stock is Deere (DE).
The big bank stocks are lower on renewed chatter about more stress tests.
The dollar is higher today, but that is not hurting a bounce in commodities. Oil prices are up to $99.67, and gold prices have bounced to $1496.
Asian markets were higher overnight, and Europe is higher this morning. The Bank of England decided to keep its interest rate unchanged at 0.5% and leave its asset purchase plan at 200 billion pounds.
The 10-year yield is up a touch to 3.14%; and the VIX is down -4% to 16.83.
Trading comment: I would expect the market to bounce from oversold levels, which also coincided with the indexes hitting their 50-day averages. We will have to wait to see how volume levels come in, and how leading stocks act. But for now, my guess is it will just be a bounce and then we will have to deal with some more selling afterwards. So I want to be patient here, and maybe even raise a little cash into this bounce with an eye towards putting it back to work at lower levels.