Ahead of the open, (18-04)
Wednesday, April 18, 2012 at 07:25AM All the fear mongering over the ‘heavy hitters’ threatening the market, especially noise around AAP’s recent performance resulted in a lot of folks caught off guard and chasing the market to SP 1390 today. SP1390 is only a few percentage points below 2012 highs and AAPL has done a round trip this week. A better than last Spanish auction (yields were down to 5.87%) and a better German sentiment number got the sentiment going and U.S earnings were the icing on the big rally day.
Still, despite DJIA up ~200 and NASD up 54 and AAPL’s round trip, investors were using the rally to pick off some profits from this year’s growth winners. It wasn’t really noticeable because all stocks bounced, but the gains were only in-line with the indices. (usually winners outperform on days like this). Considering the broad market gains, it further suggests yesterday’s premise, ”cash is being spread out in equities”, not rotated into safe havens.
The day was not quite perfect and probably suggests last week’s volatility will continue for a little longer. Surrendering some gains before a try at SP1400 is probably in the works short term as a lack of direction persists.
In all, today buys some time and relief as SP 1370 acted like support this time after consolidating a few days. The bigger auction of Spanish bonds is on Thursday, but today’s ‘bill’ auction going off well enough should allow investors to shift focus some. The shift into ‘earnings’ was the hope noted, ‘Into the trading week’.