The U.S. Stock Market enjoyed a sizable rally today, with the major averages up anywhere from 2.5% to over 3%. This should be the start of at least a short term move to the upside, and maybe something more significant. However, today’s rally occurred with a decline in volume compared to yesterday, not a good sign of conviction. If this is to turn into at least an intermediate term rally, we need to see a follow through day within the next week. This means a day with gains similar to today, but hopefully on higher volume.
The news of the day was that Wells Fargo reported better than expected earnings and that got the market started, in spite of a nasty CPI inflation report. Then, Crude Oil provided the boost for the rest of the day, as it plunged another $4 per barrell today. It broke initial support at $136, but $131 is the key level to watch, as many commodity funds will have sell orders triggered on a break below that level.
Good Trading!
Scott Cole
www.bestdaytradingstocks.com
www.kungfutrader.com
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