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Stocks jumped out the gate this morning, as investors appeared to feel a little more relieved on the Citigroup (C) bailout. C's shares jumped +57.82%! Financial stocks led the rally today: GS +26.47%; WFC +19.58%; BAC +27.2%; JPM +21.39%; PRU +16.26%; STI +26.1%. Oil closed at $54/barrel and gold traded above $810/ounce.
The Dow was up +396.97 points; SPX gained +51.78 points; Nasdaq jumped +87.67 points:
Most sectors went higher! XLE (energy) added +7.23%. XME (metals and mining) jumped +12.38%. SLV (silver) gained +9.56% while GLD (gold) went up +2.61%. XLF (financials) led the sectors with a +15.19% move. USO (oil) bounced +7.63%. FXI (Chinese ADRs) garnered +1.92%.
SPX
SPX gained +51.78 points to close at 851.81. It closed just above the 10-day MA. The MACD went higher.
Nasdaq
Nasdaq jumped +87.67 points to close at 1472.02. It closed just undder 1500. The MACD was up.
The market appears to be desparate to make gains, rallying on every bit of good news. This is an oversold environment. But, there is still much fear and lack of trust on the market. After 2 days of big gains, the market closed at critical pivot points: SPX 850 and Nasdaq 1500 could give the market some resistance. In a nervous market as this one, we're likely to see people locking in quick profits. We did some quick trades on the bullish side today and locked in profits before the close. The market is still some distance away from the 30-day MAs, which now coincide with SPX 900 and Nasdaq 1600. The market will need to rise above these levels for the rallies to hold. VIX went down into the 60s, but did a quick bounce near the end of the day. We'll need to see VIX below 60 to feel more comfortable.
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