Monday, November 9, 2009

Within News Void, Stocks Gallop Ahead

Opening the trading week with benign news from the G-20, which - through US mouthpiece Tim Geithner - stressed on Sunday that stimulus should remain in place, investors were encouraged enough to ignore the dire unemployment readings from Friday past, boosting equities right at the open and increasing the gains in a slow, steady grind upward throughout the session.

The Dow posted one of its best showings since the bottom in March, closing at its high for the year. Aided by the weakened US dollar, the other indices sported large advances, with the S&P approaching its key top at 1100, which has been hit but never breached this year. The telling part of this advance will come tomorrow, to see if the S&P can close above its previous high. With the Dow providing guidance, it appears to be a solid bet that stocks will continue to advance into the holiday shopping season. There are no meaningful earnings reports or economic data this week, so investors are on their own, so to speak.

Dow 10,226.94, +203.52 (2.03%)
NASDAQ 2,154.06, +41.62 (1.97%)
S&P 500 1,093.07, +23.77 (2.22%)
NYSE Composite 7,135.33, +177.04 (2.54%

The gains were broad-based, with 4465 advancing issues to 1338 decliners. New highs trumped new lows, 340-62, the largest daily margin in weeks. Volume was dismally low, however, as has been the case with much of the advance, even through the summer and fall. While all of Wall Street is abuzz with word of the vast sums of money sitting on the sideline, there is no indication that this money is coming into stocks as yet.

NYSE Volume 4,669,590,000
NASDAQ Volume 2,034,704,500

Commodities followed the inverse of the dollar, with oil ahead by $2.00, to $79.43, gold advancing $5.90, to $1,101.60 and silver gaining 9 cents to $17.46. Look for silver to break out soon, as it has not performed as well as gold recently. There were widespread rumors that the Indian government paid for their recent gold purchase from the IMF with silver, though that story has been widely discredited.

Investors should be buying in here on the rise, as there seems to be no impediment to stock gains. There will, however, be a pullback at some point, though the conditions for such a move may be weeks away and shallow, as has been the case throughout the 8-month-old rally.

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