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This morning, President Bush and various government officials promised to work together to revive the $700 billion rescue plan. This seemed to have given the markets some hope. Most sectors rallied. Dollar also jumped. Financials led the market higher: BAC +15.7%; PRU +11.2%; WFC +12.87%; JPM +13.9%. Chinese stocks also got a strong bounce: CHL +9.78%; CHA +9.07%; EDU +6.16%; LFC +7.85%; SOHU +9.53%; SINA +7.06%; SNDA +4.58%.
The market gapped up and continued higher into the close. The Dow was up +485.21 points; SPX added +58.35 points; Nasdaq gained +98.6 points:
Most sectors were higher. VIX dropped back below 40. Techs made solid gains with INX2 (Internet) adding +5.21%. Commodity-related sectors were strong also: USO (oil) +6.38%; UNG (natural gas) +4.78%; OIH (oil services) +5.44%; XME (metals and mining) +5.55%; XLE (energy) +6.12%; MOO (agriculture) +7.6%. GLD (gold) was down 5.02%, and SLV (silver) lost 8.49%. XLF (financials) jumped +7.11%. FXI (Chinese ADRs) hopped +11.63%.
SPX
SPX added +58.35 points to close at 1164.74. It closed above the 1150 level. The daily MAs and MACD were lower.
Nasdaq
Nasdaq gained +98.6 points to close at 2082.33. Its daily MAs and MACD continued to slide.
The market bounced and closed strongly. Most of our members seemed to be very careful today, waiting to see if the bounce would fade. The fact that the rally didn't fade was a bit encouraging. VIX closed just below 40, which is still pretty high. Could the sharp drop yesterday be the capitulation that people had been waiting for? We'll see if the market can continue to rally through this week. Any weakness would likely make investors nervous again. What the market needs is more reassurance from our law makers and get that $700 billion "economic" rescue plan passed! FDIC is now asking Congress to boost deposit insurance limits above $100,000. Other new ideas to help our economy are being dicussed. Let's hope the Congress can set aside the politics for now and make the "smarter" decision this time!
Good night and HappyTrading! ™
