Thursday stock market recap: US Equity markets staged an across the board rally with major market averages gaining 1% or more on the trading day.
The NASDAQ, +1.3% at 5132.95 and the Russell 2000, +1.3% at 1284.68 closed at fresh all time highs, while the NASDAQ also eclipsed its prior intraday high from March 2000. The DJIA at 18,115 and the S&P 500 at 2121.24 each rallied +1%, but did not take out their closing highs from earlier this year.
The S&P 500 was clearly held back by underperformance in Oil service shares; OSX,-1.9%; OIH -0.7% as WTI is struggling to hold its recent rally above $60 and Financials, particularly Banks; KBE, +0.60% , KRE, +0.85% are not loving the flatter yield curve inspired by FED Chair Yellen’s guidance of “Very Gradual” on the pace of interest rate increases the next couple of years.
The 2 worst performing sectors of the year, Utilities, and Transports, were the best performing sectors of the day. Utility investors cheered the lowered inflation expectations in the FOMC statement as well as the “Lower for Longer” take away from the projected pace of rate increases.
The DJ Utility Average, +1.5% at 575.46 is still below both the 50 day and 200 day moving averages, with the 200 day at DJU 590 being the major hurdle on any further rally.
The DJ Transports, +1.5% at 8444.38 is similarly below both moving averages. There’s also a lot of near term resistance from earlier in June at DJU 8500, with the 200 day moving average a leap beyond that at 8750.
Stock Market Today: Day Trading Ideas
As impressive as yesterday’s rally was, with relentless buying all day, I was Shocked when I looked at the internals after the close!! Advancing issues led decliners by a fraction better than 2 to 1 on both NYSE and NASDAQ.
I would have expected at least 3 or 4 to 1 on a day with 1% gains that included a rally in interest rate sensitive stocks.
I can’t remember the last time we had a 1% market move up or down with a/d stats no greater than 2 to 1. In fact the untold story of the week might be that we’ve gone at least 7 or 8 trading without the a/d line being greater than 2 to 1 positive or negative..
Where does this leave us?
Today will be a very high volume day courtesy of a quadruple option expiration topped off by the quarterly rebalancing of all S&P indices tied to the 4:00 close. Of course very heavy volumes will be concentrated on the opening and in the last 15 minutes of the day.
Additionally, there are 8 trading days left in Q2 and the first half of 2015.
Should the market build on yesterday’s gains it’s likely idle cash will be “forced in” to the market before the end of the quarter.
With this back drop, Investors will be challenged to weigh the potential risk of being under invested to start the second half of the year against the potential collateral damage to global markets from whatever happens with the Greece/Eurozone drama as well as a likely correction in China, where the Shanghai market is down 13% this week, albeit from a hyperbolic rally the last 6 to 8 months.
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