Monday, June 27, 2011

No News, So Stocks Must Go Higher

The saying, "no news is good news" accurately described the tenor of trade today on Wall Street.

Without any catalyzing headlines to spook the market - as has been the case so often in the past two months or so - investors (or rather, the algorithms that make the trades) bought stocks like they were the next best thing to sliced bread.

Amazingly, among the leading sectors was financials, which have been battered for the better part of the last six months. Others doing better than the financials included conglomerates, technology and energy.

But the real telling number came from the dollar index, as the Euro rallied on hopes that the Greek parliament would vote in favor of accepting the austerity plan from the IMF and keep the depreciating Euros flowing into the system. On that, the dollar was considerably weaker, which no doubt helped stocks. The dollar index was down 0.24 to 75.34, a level at which it could stabilize, just below 76, which it cannot break out above from, and just off the nominal lows at 71-72.

If the Fed wants a weak dollar, but not any weaker, that's likely what they're going to get, for now, though how that translates into a triple-digit move on the Dow is known only to those insde the minds of the machines.

Today's move is still rather curious, considering that Greece will vote on the austerity measures in less than two days and the margin of passage is down to about one vote, as four members of Papandreou's 155-seat majority have already expressed a reluctance to vote in favor of the measure. The Greek parliament has 300 members, so the situation is dicey, especially with nationwide strikes planeed for Tuesday and Wednesday.

But, since nothing happened today to unravel the fiat currency regime a bit further, stocks finished widely positive, though well off their intraday highs.

Dow 12,043.56, +108.98 (0.91%)
NASDAQ 2,688.28, +35.39 (1.33%)
S&P 500 1,280.10, +11.65 (0.92%)
NYSE Composite 8,031.08, +56.36 (0.71%)

As expected, advancers clobbered decliners, 4366-2198. On the NASDAQ, 64 new highs, but a startling 51 new lows, a bit odd for such a healthy positive day. The NYSE saw a similar circumstance, with 52 new highs, but 39 new lows. The combined figure, therefore comes to 116 new highs and 90 new lows, close to flat. Volume was back to its usual pedestrian levels, another indication that the rally has short legs, if any at all.

NASDAQ Volume 1,693,123,125.00
NYSE Volume 3,583,716,000

Oil fell again, briefly trading below $90/barrel, before rallying back to close at $90.61, down 55 cents on the day. Gold was battered down for a third consecutive session, losing $6.10, to $1496.20. Silver is apparently being made a whipping boy once again by the likes of JP Morgan, dropping 81 cents, to $33.51. That's the lowest close for silver since May 12, when the London daily fix was $32.50 the ounce.

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