Quick Note from Blain: We had 54 total entries for the signed options books giveaway. Our three winners are Gilles, Bob I, and David S. All three of you have been emailed and/or messaged. Please respond so we can email you your books. Thank you everyone who left a comment, a great response overall!"
Congrats to the 3 winners of the options books giveaway. Back our normally scheduled market commentary! We mentioned yesterday a lot of constructive things happened technically and today we saw a very positive follow through to that action. Some more positive economic news rolled in from China overnight, and it appears increasingly likely President Obama will not have Congressional backing for Syrian strikes. This led to a gap up at the open and what we have been calling a "gap and nap"; that is a surge at the open and then a very quiet afternoon with almost no volatility. That said in a short time frame we have gone from oversold to overbought. This is now the 6th straight up session for the major indexes, and 8th in the last 9.
One note for those who follow the Dow Jones Industrial Average - some key changes were announced today as 3 companies left, and 3 companies were added to the old school 30 stock index.
We saw very positive follow through in both the major indexes:
The volatility index dropped substantially; usually when this drops it leads to positive action in the market.
Our NYSE McClellan Oscillator is already reaching overbought status as this has now essentially been a 2 week rally.
The market does seem to be accepting this back up in 10 year yields now, after two rounds of "shock and awe" at their movement up.
Some movers and shakers today as we can now focus back on individual stories with the market acting healthier. Chinese travel company Ctrip.com (CTRP) held in very well during the selloff; it build a nice pennant during the U.S. correction. Today it broke out from said pennant.
Trucking company Navistar (NAV) had a nice headfake for bulls early last week but other than those two days held in very strong during the August correction. After shaking out some investors, it broke out today.
While a lot of housing related stocks were hurt during the correction, especially as higher interest rates drive mortgage rates up, Lumber Liquidators (LL) did not. That relative strength led to a nice move today.
What more can be said about Netflix (NFLX); one of the four horsemen? Shorts have simply been roasted in this name in 2013. Another great day for this stock.