Well…another triple digit day in the market. Bullish arguments prevailed today as credit markets thawed, commodity prices rose, and more stimulus was discussed. We discussed that the market was 30% below its 200 day MA last week and how that is helping create a nice market environment for buying amidst all the problems. The journey towards the 200 day MA will probably be a volatile one, but appears to be on the way to happening. Why? Well lets look below.
1. Fed chairman Bernanke spoke on Capital Hill today and suggested that another dose of fiscal stimulus from congress would be an appropriate measure given the current economic climate. Today was one of the first days that the market didn’t sell off after a high ranking official discussed the economy. More money in the hands of the consumers will boost consumer spending and ease some of the housing worries.
2. Strong earnings from Halliburton. Halliburton had better than expected earnings this morning lending a boost to commodities and commodity stocks. The rally was helped by an analyst call out of Oppenheimer calling a bottom on the energy complex. Last night, around the world, commodity stocks gained as many feel that global recession concerns are already priced in to otherwise strong growing stocks.
3. Thawing of Credit markets. Perhaps the greatest catalyst for the recent market crash has been the freezing of credit market. LIBOR, which is the London Interbank Offered Rate, has been so high that banks have had trouble lending. There was a significant push lower today on LIBOR reflecting the thaw in the improving credit markets.
Happy Trades,
Jeff
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