The dollar had only its third down day in the last eleven yesterday, but with oversold sectors like materials, metals and commodities it was a great catalyst to send them higher. MEE,XLB and XME were radar names on Friday morning.
The 50 DMA is parked up at around 1106 and the market could sloppily trade up to that level if it wants to. Volumes were unimpressive yesterday and although some of the financials rebounded, they need more time to build a bullish base. GS bounced and so did JPM, but up volume was less than Friday’s down volume. As a matter of fact, it was very boring for most of the day after the action of the first hour as the S&P traded in a about a five point range after that.
The trend has changed and the move will probably resume lower at some point soon in my opinion. Deeply oversold conditions aided by a drop in the dollar set things off yesterday, however sectors can keep their rally legs for more than a day, so keep your eye on coal, oil, materials and mining very short term.
Mellon bank bought PNC’s investment banking unit for a few billion. China gave us a hard time last weak about arm sales and today they are warning us of a planned visit with the Dahli Lama. They have also asked that hot dogs and burgers be replaced at the Super Bowl with P.F Changs.