The Asian/Pacific markets closed mostly up. Hong Kong and Japan rallied more than 2% and China, Indonesia, Singapore, South Korea and Taiwan more than 1%. Europe is currently up across the board. Greece 3.2%, Austria, France, Germany, Norway and Stockholm more than 1%. Futures here in the States point towards a 6-point gap up open for the cash market – that’s 15 points off its high from late yesterday.
The dollar is down. Oil is up 1.3%, copper 2%. Gold is flat, silver is up.
The big news over the weekend is the bailout of the Spanish banks. Spain is getting 100 billion EUR, but although most indexes is Asia closed up and all in Europe are currently up, the gains were moderate – not huge as one would expect. And Spanish bond yields are up this morning, so it’s not all good. We’ve known for a while news could quickly induce a big gap up or gap down. The news we got – that the Spanish banks would be back-stopped – should have caused a big gap up, but it didn’t. Today’s open will be nothing out of the ordinary. Last week was the best week in several months. Perhaps Wall St. knew what was in the pipeline. It’s as if traders worldwide breathed a big sigh of relief at first but then realized there are still major issues.
Apple’s WWDC (Worldwide Developers Conference) starts today. A nice convenience considering the stock is sitting near resistance.
GE may break off parts of GE Capital.
Standard & Poor’s warned India may be the first of the BRIC (Brazil, Russian, India, China) to lose its investment grade status.
Otherwise I don’t have anything to add to the comments I made over the weekend in the weekly report. The charts improved a bunch last week, but lower highs and lower lows remain in place. The bulls now have a cushion to work with – they don’t have their backs against the wall – but they do have work to do. Several key indicators hit oversold levels and bounced and many key stocks are sitting near the tops of their ranges. It’s entirely possible a bottom has been put in place, but again, there is work to be done.
Today is important because how the market responds to news tells us a lot. Strong markets embrace good news and use it as an excuse to rally. As of now the S&P will gap up 5-6 points. If the index gives it back during the first hour of trading, fne, but I’d want to see buyer step in after that. More after the open.www.leavittbrothers.com