Wang’s Happy Trading

The market continued to push upwards from yesterday’s bounce. The Dow gained +117.78 points; SPX added +11.20 points; and Nasdaq was up almost +14 points.

The Fed Chairman, Ben Bernanke, signaled further interest rate cuts to support economic growth. The market reacted very well, initially, as eager investors tried to catch the “Uncle Ben Express”. Then, “the train” stalled and some people disembarked. But, around 2pm EST, rumors of Bank of America (BAC) in aggressive talks to buy Countrywide (CFC) allowed the market to shift into a higher gear.

How far is this ride going to go? Let’s take a look at how the market closed:

VIX continued to drop. INX2 (Internet), SWH (software), and BTK (biotech) were in the green. GLD (gold) was very strong today, gaining almost +2%. GDX (gold miners) and XME (metals and mining) added +1.74% and +2.62%, respectively. HGX (housing) added +2.59%, while XLF (financials) advanced +1.71%. FXI (Chinese ADRS) traded higher intraday, but, ended the day with just a +0.77% rise.

SPX

SPX gained +11.2 points to close at 1420.33. It closed above the 1410 support level, which is an encouraging sign. 1440 was a support level just last week. Now, it could be the next “resistance”. Let’s see if the broader market has enough strength to get above it.

Nasdaq

Nasdaq continued upwards almost +14 points and closed at 2488.52. 2550 was the November low, which could now be the next resistance.

As mentioned earlier, BAC is rumored to be in talks to buy CFC. BAC was up +1.45% while CFC jumped +51.37%. YHOO is rumored to be “wooed” by MSFT, prompting a +6.78% rise in YHOO shares. X received an “aggressive buy” rating today. Its shares traded above $112 today, but, closed at $109.64, up $8.4, or +8.3%! ILMN settle an ongoing patent dispute with Affymetrix. Its shares set a new ATH of $75.20 today and ended at $70.02, up $9.57, or +15.83%. CHU, CHA, and CN have been rising and breaking out for the past three trading days. Today these stocks added +8.3%, +6.63%, and +4.1%, respectively. I wonder if the largest (by market cap) of these Chinese telecom companies, CHL, which is partnering up with RIMM to deliver Blackberries to China, will soon make its breakout move!

Good night and HappyTrading ™