By Harry Boxer, The Technical Trader
The indices ended the week with a bang in a huge up-session Thursday ahead of the holiday weekend.
The day started out with a big gap up as the indices exploded on a better-than-expected earnings pre-announcement from Wells Fargo (WFC) which sent the financial sector surging 15.5%, and which induced buying in the broader market as all three major indices were able to log their best single session percentage gain in two weeks and close at their session highs.
The large opening gap up was followed by a strong surge after the gap, especially on Nasdaq. They then had a morning pullback that held support, and then came on and rallied again, with the SPX rallying into the close.
Net on the day the Dow was up 246 to over 8083, the S&P 500 up 31.40 to 856.56, and the Nasdaq 100 up 39.53 to 1340.28. The Philadelphia Semiconductor Index (SOXX) was up 11.70 to 254.41, a nearly 5 percent gain.
Advance-declines were very strong, with 2744 up and only 367 down on New York and 2324 to 481 on Nasdaq. Up/down volume was close to 15 to 1 positive on New York on total volume of over 1.8 billion. Nasdaq traded just under 2.2 billion and had about an 11 to 1 positive volume ratio.
TheTechTrader.com board, other than the ultrashorts, had a big session. Goldman Sachs (GS) led the way, up 9.58 to 124.33 in a very strong financial group. Wells Fargo, as mentioned, on positive earnings, was up 4.72 to 19.61 on 373 million. Bank of America (BAC) traded over 1 billion, advancing 2.49 to 9.55. Morgan Stanley (MS) gained 2.66 to 25.35, and JP Morgan (JPM) rose 5.32 to 32.75. Hartford Financial Services (HIG) gained 1.21 to 10.80.
Retail was strong, as Best Buy (BBY) jumped 1.64 to 41.09 and Amazon (AMZN) was up 2.79 to 79.77. Also, Aluminum Corp. of China (ACH) gained 1.19 to 18.72, and American Italian Pasta (AIPC) was up 1.61 to 34.24.
Research in Motion (RIMM) gained 2.27 to 64.18, and Apple (AAPL) up 3.25 to 119.57 in a strong handheld sector. SunPower (SPWR) at 26.04 was up 2.64 and Energy Conversion Devices (ENER) added 1.11 to 15.02, in a firm solar sector
Among the ETFs, the iShares MSCI Brazil Index ETF (EWZ) was up 2.21 to 44.70, and the iShares FTSE/Xinhua China 25 Index (FXI) 1.34 to 31.85. The U.S. Oil Fund ETF (USO) added 1.20 to 30.69, and the Direxion Financial Bull 3x Shares (FAS) leapt 2.52 to 8.71 on 320 million shares.
On the downside, ultrashorts got destroyed, with the SKF down 23.64 to 64.88. The UltraShort Real Estate ProShares (SRS) fell 10.37 to 32.89, the Direxion Large Cap Bear 3X Shares (BGZ) down 6.49 to 48.77, and the Direxion Financial Bear 3x Shares (FAZ) lost 7.35 to 10.49. That’s down from 115 just 5 weeks ago!
Stepping back and reviewing the hourly chart patterns, the indices gapped up, never looked back, did have a mid-morning retracement, and a late afternoon consolidation but net on the day closed extremely strong and closed the week with a bang, breaking out across key overhead resistance on the SPX and NDX.
So the rally continues, but we’ll see how it goes early next week.
Good trading!
Harry
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