Positive Signs for the Market

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Includes: BBI, DIA, EMR, GCI, HOV, MOS, QQQ, SPY
by: Wall Street Strategies

Maybe it's a sign of things to come but the action yesterday was very compelling. I sense some panic buying as fence-sitters understand that they'll have to make a stand or probably spend the next leg higher crying in their milk...again.

The market is still range-bound but acts like all is forgiven or forgotten. That "sobering" jobs report last Friday, all those economic data releases that missed the mark, all the corporate insider selling, and the fact the market is up 505-points from the low of the year are all forgotten or forgiven.

Then, there are signs like those from Gannett (NYSE:GCI), Hovnanian (NYSE:HOV), and Blockbuster (BBI) being able to go out and raise money. Forget about more IPOs, (IPO's tripled to 17 during the third quarter) these are companies that have been left for dead like a Clint Eastwood movie; they have the scars to prove they've been to hell and back but are still hanging tough.

Additional signs that the market is ready to move higher is the action in a couple of stocks in the news yesterday.

  • Mosaic (NYSE:MOS) posted an earnings report that could only be described as coyote ugly, but the silver tongue of the company's CEO has the shares higher.
  • Emerson (NYSE:EMR) made a $1.2 billion acquisition yesterday and its shares are noticeably higher.

Of course, there are still things to worry about, including weak volume. Retail stocks are up smartly ahead of the same-store sales data set for release this Thursday, but across the board volumes within the sector are problematic. The same thing with energy stocks, especially coal names.

I'm looking for some anxiety to enter the market, maybe not enough to derail today's momentum but enough to maybe see a lull in the action.

The Dow Jones Industrial Average looks great on the chart, bouncing off the trend line, and is on the cusp of breaking out. However, we aren't adding at the moment.



Written by Charles Payne, CEO and Principal Analyst of Wall Street Strategies (wstreet.com) providing independent stock market research to over 30,000 subscribers, in more than 60 countries. Mr. Payne is a regular contributor to the Fox Business and Fox News Networks. For more information about Mr. Payne, please refer to the company’s website www.wstreet.com.