Tuesday, March 23, 2010

Stocks Surging into Final Hour on Short-Covering, Technical Buying, Declining Sovereign Debt Angst

Broad Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Above Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • VIX 16.51 -2.25%
  • ISE Sentiment Index 154.0 +22.22%
  • Total Put/Call .73 -19.78%
  • NYSE Arms .82 +14.11%
Credit Investor Angst:
  • North American Investment Grade CDS Index 87.80 bps -4.01%
  • European Financial Sector CDS Index 77.33 bps -1.05%
  • Western Europe Sovereign Debt CDS Index 74.82 bps -1.88%
  • Emerging Market CDS Index 218.44 bps -1.44%
  • 2-Year Swap Spread 17.0 bps -2.0 bps
  • TED Spread 16.0 +1.0 bp
Economic Gauges:
  • 3-Month T-Bill Yield .12% -2 bps
  • Yield Curve 270.0 bps +1 bp
  • Copper Days Demand 15.26 days unch.
  • Citi US Economic Surprise Index +41.50 +.3 point
  • 10-Year TIPS Spread 2.21% +1 bp
Overseas Futures:
  • Nikkei Futures: Indicating +25 open in Japan
  • DAX Futures: Indicating +21 open in Germany
  • Higher: On strength in my Financial, Biotech and Tech long positions
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long
BOTTOM LINE: Today's overall market action is bullish as the major averages break to session highs out of their recent range, despite China bubble/trade concerns, healthcare reform fears, tax hike worries and disappointing economic data. On the positive side, Semi, Computer, Steel and Coal shares are especially strong, rising 2.0%+. Small-cap and cyclical stocks are outperforming. Despite an equity rally, poor US housing data and news that Eurozone countries are close to a Greek aid deal, the euro is trading near session lows, falling .35% against the dollar. Considering these developments, huge speculative shorts in the currency and its oversold state, it trades very poorly. Weekly retail sales rose +3.4% this week, which is the highest since the week of April 10th, 2007. On the negative side, Oil Service, Gold, Internet, Medical, Hospital, HMO, REIT and Education stocks are all down on the day. The market's performance today is very impressive again, considering the news. I suspect some large shorts are capitulating today, which is adding to broad market gains. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, declining sovereign debt angst and technical buying.


Anonymous said...


Anonymous said...


Forget about foreign sovereign debt,apparently the folks aren't too happy about what they see at home.

In FOX poll, 79% say collapse possible.


Can all of Goldman Sachs horses and all of it's men hold back the tide?


Gary said...