Stocks Enjoy Broad Rally

U.S. Stocks rallied across the board on Thursday on the back of a variety of news items. Some retailers are reporting better than expected sales in October, suggesting the holiday season may give a lift to the economy. Weekly jobless claims dropped significantly, and it was reported that 3rd quarter productivity was up over 9%, higher than the previously reported 6.6%. Finally, the European and UK central banks held interest rates steady, but suggested they will be pulling back on debt purchases.

All of the major averages were up significantly, and closed at the highs of the day. Once again though, volume was low, although the Nasdaq averages had similar volume to yesterday.

The market had been oversold to the downside, and had pulled back to, and in some averages, below major support. The Dow Jones Industrial Average is still trading within an uptrend that really has not been broken. The other averages clearly have broken technical support levels and will find it more difficult to make new highs. More significant positive news on the economy will be required to keep the market going higher.

With all that in mind, it was a good day for day traders playing the long side. Yesterday I mentioned that the overall technical pattern of the markets on a short term basis was not favorable. However, that was over ridden with a strong trending move to the upside. The market started higher and never looked back all day. These are the kinds of days where daytraders can make spectacular gains. Check out the chart of AWI below. This stock brought day traders 10% on the day by trading a standard opening range breakout. This is the type of trade that can make your month!

Scott Cole www.bestdaytradingstocks.com