Thursday, June 10, 2010

Thunderous Thursday

Dow Jones 10,172.53 +273.28 +2.76%
NASDAQ 2,218.71 +59.86 +2.77%
S&P 500 +31.15 +2.95%

Signs of hope, as opposed to the apocalypse, prevailed today. Much as the thunder was more crackly and monotone rather than bone-rattling and spooky — volume was inept overall —it was still a winsome day for bulls.

> FXE (Euro) finished at 121.05 (+1.28%), giving bulls a long leash to go and play. In turn, UUP (Dollar) was down 1.05% to 25.38.

> Copper king FCX was up again, a whopping 5.94% to 64.36, and X (US Steel) rose 4.48% to 43.19. Key moves that indicate demand is up, and judging by another positive day for FXI (40.04 +2.42%), downward momentum has been stalled. Maybe reversed.

> Rotation is in play, apparently, as GLD (119.08 -1.31%) and TLT (96.19 -1.79%) retreated again. A majority of traders and investors in gold aren't going to make round trips to and from stocks, but the ones who do are traveling in relative safety. Road bandits were nowhere to be seen today.

> Energy rose to the rafters. Oil had been trading up even with BP deep underwater, pun intended. But BP finally bounced off its lowest share price in 13 years and finished at 32.78 (+12.26%). That killed inverse oil ETNs like SCO (-4.77%) and DTO (-5.00%). Nimble traders who owned BP through this catastrophe wisely scooped up SCO and/or DTO as insurance and escaped disaster.

> More energy: Natural gas continued its climb after a short pullback. In the week since Obama raved* about clean energy, most of the 40 natty gassers on my list are up significantly. Earlier today, all 40 were in the green. The strong finish made this a 40-for-40 day in the natty gassers. I doubt this will ever happen again.

One strange phenomenon was that UNG was often among the nat gas leaders when the market had pullbacks in the past five sessions. The much despised vehicle has reverted back to its former self while almost all natty gassers rocket higher. UNG gained a measly 0.13% (7.99). The other 39 gained at least 1.29% and as much as 9.67% (CRZO). The top 10 nat gas plays today were CRZO (19.74), DIG (29.41 +9.53%), BEXP (17.78 +8.22%), PETD (23.78 +8.2%), ROSE (24.87 +7.38%), NGS (16.07 +7.28%), KWK (13.12 +7.19%), HERO (2.77 +6.95%), PXJ (15.25 +6.64%) and COG (36.36 +6.38%).

> Financials had their day, too, more on the Eurozone side than here. STD launched 10.23% (9.90) after dipping below 9 yesterday. IRE gained 8.59% (3.92) and NBG lifted 2.24% (2.28). FAS had another knockout performance (22.60 +9.5%).

It wasn't a perfect day. Lack of volume plus lack of leadership by GS, which was down 2.21% (133.77). GS traded as low as 131.30 and as high as 137.77. C wasn't much to cheer about either with gain of 0.78% (3.90). C has usually been a productive vehicle with an entry point below 3.60, but turns into a pumpkin often enough at this level. It might have enough legs to reach 4.10, but would be it, normally.

FXY (Yen) closed down 0.14% to 108.51, and that released some of the pressure on the market.

So many moving parts and one breakdown could put the engine out of whack again. Until then, souped up plays like BIDU (72.63 +7.76%) and NFLX (118.66 +2.8%) will work.

In spite of the lack of perfection, AAPL was impressive. After selling down to 242-plus, shares ran up to 250.51 by the close, near its high of the day (+3%). GOOG also finished well at 498.01 (+2.74%).

They both traded below average volume. So maybe they gain volume tomorrow, inflows increase back to the market and we can put our rose-tinted glasses on again. Or the lack of conviction turns the market back into a race for the exits tomorrow (or next week) when momentum shifts.

I'm still paranoid. All this information is nice. Charts are cool. But the guessing game is not that fun and traders who stepped away and went on vacation for the past few weeks are mostly doing as well or better than most of us who have stayed close to the action. Going long AAPL, for example, wasn't a serious consideration this morning, so I spent most of the day sleeping like most people in my time zone.

I imagine there are a lot of Apple/AAPL fans out there who are wary of stepping into the water again, especially when volume is unlikely to match rallies of February-April of this year, or 2009.

Enjoy the bounce!


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