All Aboard!!! Ha, ha, ha….
We played a classic at the office headquarters this morning to get our day started and there was no introduction needed after the bulls pushed new multi-year and decade highs yesterday. Mario Draghi and the European Central Bank (ECB) said exactly what the market wanted to hear which lead to a bull jailbreak.
The Dow zoomed 245 points, or 1.9%, to close at 13,292. The index easily cleared 13,200 and challenged 13,300-13,350 which is the last line of resistance before new 52-week highs.
The S&P popped 29 points, or 2%, to settle at 1,432. The index went out at its high after clearing our 1,425 target which sets up a run to 1,450. Yesterday’s close was also a 52-week and 4-year high for the S&P.
The Nasdaq soared 67 points, or 2.2%, to finish at 3,135. We mentioned once 3,100 cleared there could be a push to 3,150 which is less than a half-percent away. Tech closed at an 11-year high.
The Russell 2000 added 17 points, or 2%, to end at 838. Here were our thoughts Wednesday morning as we could feel something in the air from Tuesday’s close:
“The big story for the day that the talking heads failed to mention was the Russell 2000 which was up 10 points, or 1.2%, and closed at 822. The move above 820 was super bullish and gets 830 back in play which was last seen on May 1. The small-caps traded to a high of 823.77 after testing 807 in the morning.”
We mentioned in our Weekly Wrap the charts were bullish for this week and that the Wall Street pros could be forced to buy stocks after coming back from vacation if there was a rally to resistance and a flood of buying. Bingo.
Of course, we gave you an early clue on Wednesday there was a strong bid in the market but with everyone all of a sudden rushing to one side of the boat we now have to be careful over the short-term. While there may be a continued rally, yesterday felt a little like a bullish capitulation day and Germany still has to approve the ECB’s plans next week.
Futures are showing a positive open despite a worse-than-expected Nonfarm Payrolls number which we will cover this afternoon. Dow futures are up 22 points to 13,297 while the S&P futures are higher by 3 ticks to 1,434. Nasdaq 100 futures are down a half-point to 2,825.
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