Courtesy of John Nyaradi.
Stock prices on major indexes rebounded today on easing worries in Europe
Major US stock indexes rallied today, back into significant resistance as this trading range continues.
The Dow Jones Industrial Average (NYSEARCA:DIA) climbed 194 points or 1.5%, while the S&P 500 (NYSEARCA:SPY) added 1.55%.
In the small cap sector, the Russell 2000 (NYSEARCA:IWM) jumped 1.6% while the widely watched Nasdaq representing the tech sector (NYSEARCA:QQQ) advanced 2%.
The rally was largely driven by news from Europe where Spain conducted a successful bond auction and positive comments about global growth expectations from the International Monetary Fund.
IBM and Intel were hit hard after reporting earnings while Yahoo! pleased its investors and rose sharply in the after hour session.
Bonds remained subdued as worries about Europe lingered.
Economic reports came in on the negative side as housing starts declined and industrial production and capacity utilization were flat.
Tomorrow has no economic reports while earnings will continue to come full force.
Bottom line: Today was a low volume rally which has been the case lately. Distribution days, or selling, have been on higher volume while buying days are on lower volume which is typically a red flag for higher prices ahead, and many technical indicators tracking momentum and breadth continue to come up negative so the sustainability of the upward trend remains doubtful.
Click here to learn more about John’s book and for a free membership to Wall Street Sector Selector
