This morning, the latest home sales data came in better than expected. Stocks saw strength right from the start. Energy stocks bounced: SLB +8.81%, HAL +11.96%, APA +4.24%, UPL +10.34%, EOG +6.86%. Coal stocks also attracted buyers back in: WLT +6.13%, CLF +5.95%, PCX +8.95%, BTU +7.65%. The exchanges were very strong as well. Both CME and ICE reported record trading volumes in May. CME shares jumped $11.29 and ICE propelled +3.62% higher.
The market actions today were a complete reversal of yesterday. The rally excelerated up into the close! The Dow was up +225.52 points, erasing almost all of the recent 2-day loss! SPX added +27.67 points and Nasdaq gained +58.74 points:
OIH (oil services) led the commodity sectors in the bounce, garnering +6.14%. XME (metals and mining) added +5.13%. Both USO (oil) and UNG (natural gas) moved higher. SOXX (semiconductors) rose +3.62%. XLF (financials) advanced +3.13%. FXI (Chinese ADRs) was up +2.73%.
SPX
SPX added +27.67 points to close at 1098.38, just below the 1100 level. Its MACD moved higher.
Nasdaq
Nasdaq gained +58.74 points to close at 2281.07. It closed above its 10-day MA.
For almost 2 weeks now, SPX seemed to have been fighting with the level 1080. The market has been violently swinging back-and-forth around this level. Today, SPX closed above this level and almost touched 1100. Both SPX and Nasdaq closed above their respective 10-day MAs. Another important levels that bulls are watching is Dow 10,000 (see chart below):
Dow
We can clearly see that in the past 2 weeks, buyers have been waiting to come in around that 10,000 mark.
Today’s reversal was actually pretty bullish. The market went down yesterday to test the support and immediately bounced back and closed above the 10-day MA. With a couple of more up days, we should see the 10-day MA flatten and perhaps start to turn up. On Friday, we’ll get the latest unemployment rate. Some say that the numbers had already been leaked out and they are better-than-expected. Tomorrow, the latest unemployment claims numbers will be released; perhaps these can give us some clues.
Some trading ideas:
Upside:
Techs will be strong in a strong market environment. AKAM, SNDK, FFIV, CREE all have good fundamentals and reported superb earnings.
Downside:
If the market slides back, the oil services are still vulnerable. RIG lost another 3.38% today, even though the market was bouncing. BP‘s +3% gain today is likely a temporary relief.
Good night and HappyTrading! ™ 
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