The markets traded mostly flat on Monday on limited volume and news. The market appeared ready for a bounce in pre-
market with extended excitement over the tax cut extensions, but the market quickly changed its tune and began to sell off and remained flat for most of the day, only dropping as low as fifty points down before recovering before the close and ending mixed. The midday rally, though, shows some definite bullishness in the market, and it should be viewed as something positive rather than negative.
market with extended excitement over the tax cut extensions, but the market quickly changed its tune and began to sell off and remained flat for most of the day, only dropping as low as fifty points down before recovering before the close and ending mixed. The midday rally, though, shows some definite bullishness in the market, and it should be viewed as something positive rather than negative.The Dow finished up down nearly 14 points. The Nasdaq finished up nearly 7. The S&P 500 finished up 3. Gold finished up nearly 7.
On the economics front, there was nothing out for investors to sink their teeth into today. The first news won’t be until Wednesday and Thursday when investors get a bevy of economic data about the housing market. That news, I expect, should be somewhat upbeat and could help the markets end the year strong. If they disappoint, however, they could threaten the consistent rally we have been having.
Company news was limited as well. Boeing (BA) looks like it may announce another delay (another!!) of their Dreamliner aircraft, which will most likely push it back even further into 2011 or maybe 2012. On the positive side, more and more mergers and deals are being struck between companies. AT&T (T) is going to buy spectrum licenses from Qualcomm (QCOM) for close to $2B. Amazon (AMZN) commented that they are doing very well on online sales, and they should benefit greatly from some $30B done in sales online.
Moving into tomorrow, we are holding our position in Discover Financial (DFS), which continues to be weighed down by AXP and could blast off at any point. The stock got an upgrade and didn’t budge as AXP weighs on the sector. We are also holding MU, BIDU, FSLR, and FINL, looking for at least a 3% gain on all.
My take on the markets right now is that we are going to be pretty light on volume into the close, but we need some big news to move in either direction. We will stay pretty bullish until there is reason for this sentiment to change. Buying on any dips like we did today is a great way to trade right now. Wednesday will be a key day with economic data. The light volume will magnify movement in the markets for sure.
That’s it for today.
Good Investing,
David Ristau
