Markets attracted some “bargain hunters” today, sending stocks to close
modestly up across Asia. China up +0.30%, Taiwan up +0.43%, Singapore up +0.44%, South Korea up +0.06%, Japan up +0.95%, Australia up +0.32%. However, India down -1.25 and Hongkong down -0.07%. As we have reported in the last few days, Japanese Finance Minister Yoshihido Noda issued the strongest language to date in regard to currency intervention. Today the Japanese Prime Minister Naoto Kan further assured investors that the government is ready to take some “bold” action. Equities in Japan market edged up higher as the yen weakended against the dollar.
In the US front…
GDP for Q2- 2010 was revised to 1.6%; this is a significant downward revision from 2.4%; however, it’s better than Wall street’s expectation of 1.4%. All the major indexes enjoyed a huge rally that has not seen since AUG 2, the DOW closed at 10,150.65, up +1.65%. The Nasdaq and the S&P500 both also closed up 1.65%, to 2,153.63 and 1,064.59, respectively.
Ned Riley, CEO of Riley Asset Management commented today that he does not believe in the double-dip theory and he strongly feels the market is undervalued. Joe Battipaglia, Market Strategist-private client group for Stifel Nicolaus, however, is more cautious. “Not one person in Wall Sreet can make a case for housing recovery. And stocks are just in a trading range for months. The S&P500 could dip to 950, he added.” Goldman Sach Strategist analysts John Noyce also joined the bear camp, citing US equities market might go under consolidation at 1030-1040 range. However, his target for the S&P500 is 900 range, citing the H&S formation is confirmed.
Support levels for the S&P now are 1010, 1020-1030, 1050. Resistance are 1070-1080. The 50d-MA at 1084.26 remains “another brick on the wall”. Equities market rallied today due to the better than expected GDP revision. However, technically the market is in a serious down trend that long term support is at 900 range. One should avoid betting too heavily on either side as we are still in the dogs day of the summer with high levels of uncertainty and volatility. On that note, please have a nice weekend everyone.
Best regards to all, and good luck in your trading.