It feels like the calm after the storm, or should I say "storms." Volume is still so-so at best, but the market has waved off several pullback attempts and is acting pretty well. One wonders what the news will be that hits today at 3:30 pm and derails the action. I don't think it's going to happen, but I wouldn't be surprised if it did. The President is set to speak and will infer criminal mischief could have played a role in the BP spill. I would hope the rhetoric is toned down a notch. I hope one of President Obama's Madison Avenue buddies text messages him about the effects of non-stop browbeating. Heck, how evil can business be in the richest nation in the world? Of course, there is the old scorpion and the frog issue, but the nation needs a break.
The market needs a break, too.
The Dow takes off with a close above 10,258, and has plenty of upside. I like the action in energy stocks and airlines. The former is plainly oversold, and the latter reflects the possibility of higher discretionary spending. The index is near a perfect double-bottom, typically a bullish chart formation. A move through the aforementioned 10,258 should lift the index toward 10,500.
There is better news out of Europe.
Spain: Jobless claims down 1.86% after declining 0.6% in April, the decrease was the largest month over month result in five years. The country's unemployment rate may have peaked at 20%.
Portugal: Raised $680.3 million through three month t-bills and the bid to cover ratio climbed to 3.5 from 2.4. There was a spike in yield, which helps to explain higher demand (bid to cover) as these t-bills paid out an average yield of 1.861% from 0.476% in April.
USA: Pending Home Sales exceeded consensus, driven by a big-time spike in the Northeast.
Auto Sales Data
* GM: +31.8% for four core positions, +16.6 with all brands
* Chrysler: +33%
* Ford: +21.9%, the Street was expecting 16.0%