Indexes opened up quite strongly Monday on hopes that geopolitical tensions would lessen, rallied mid morning but lots some steam as the day went by. There is still some work to do to get comfortable with the market right now – we’ve just seen a bounce that wiped away an extreme oversold condition. Investors were also happy with a statement from a key Federal Reserve official, Stanley Fischer, the vice chairman who said that the recoveries in the U.S. and global economies had been “disappointing” thus far, indicating the Fed may not imminently tighten its monetary policy. The S&P 500 added 0.28% and the NASDAQ 0.70%
The NASDAQ did break through this short term trendline which held it back on each attempt to rally last week; that is a positive. But the index is still range bound. The S&P 500 we have to watch to how it reacts if and when it gets back to the trendline that was support for many months. Sometimes former support becomes new resistance so if the market rallies into the 1960s we will have a key test.
The NYSE McClellan Oscillator has now rallied to a positive number from an extreme -80 area in 2 sessions.
Priceline (PCLN) rallied on quarterly results that beat analyst estimates but its current quarter earnings forecast fell short of expectations.
Shares of Kinder Morgan Inc (KMI), the biggest U.S. pipeline company, jumped after the company said on Sunday that it would put all its publicly traded units under one roof in a $70 billion deal. The shares of the company’s other units – Kinder Morgan Partners (KMP), Kinder Morgan Management (KMR) and El Paso Pipeline Partners (EPB) – also rallied.
On the negative side we have Zillow (Z) which finally has rested these past 3 weeks after a massive run. It has given back over $30 in short order but now sits right at its 50 day moving average which generally would be a decent area of support. You can see it has bounced off that level many times this year, including mid July. On the flip side it has had such a huge 2014 that if it falls through this support line there is a long way down it could possibly go. But in this case until you see it change its pattern you assume the pattern repeats – it sets up for a nice trade with a $5 stop or so.