The Bulls Are Getting Louder
Yesterday was another 90 upside day (where 90 percent of the volume was on the upside), which, according to Lowry, is the eighth 90 percent upside day since the market bottom on March 9th.
The S&P 500 is now positive for the year, the Dow Industrials still down 4 percent.
The issue now is how much more juice is left in the current rally, which has taken the S&P 500 34 percent off its March 9th lows. Rallies that are running out of steam show it by fewer advancing stocks-Lowry notes that the percentage of stocks trading above their 10 and 30 day moving averages are trading off their recent highs, an early sign of an aging bull market.
One factor helping this rally: bullishness is very muted, though that may be changing. Many professional traders remain convinced that the market still has another leg down this summer, so that has kept a lid on rampant buying.
1) Many Asian marketsare trading at the highest levels since October (the Shanghai index is at its highest levels since August).
2) MGM trading up 13 percent pre-open on more optimistic commentary. Remember how every company-particularly financial companies-cancelled conventions in the first quarter? MGM noted lower revenue from those cancelled conventions.
However, the company emphasized the positive, saying they saw signs of improvement in occupany and rates. Remember, they have settled a dispute over the City Center project with their Dubai World partners and it now appears the project is fully funded.
Las Vegas Sandsalso trading up in sympathy.
3) Dow component Kraft Foodstrading up 4 percent after beating estimateson improved profit margins. Effective cost controls and the realization of higher prices boosted the food maker's results and helped offset weaker demand.
In fact, while volume was down 3.7 percentage points, organic revenues grew 2.3 percent - primarily due to the 5.7 percentage point rise from more favorable pricing. The company also reaffirmed its full-year guidance to be in-line with the Street's forecast.
4) Shares of seed processor Archer Daniels Midlanddown 6 percent pre-open after its Q3 results significantly missed estimates. Revenues plunged 21 percent, as volume fell 6.2%.
5) CVS Caremarkis up 1 percent pre-open as its bottom line results beat estimatesby a penny. Top line results were propelled by strong growth in its pharmacy services unit and solid same-store sales at its retail pharmacies.
6) Sonic Automotiveup 13 percent pre-open on light volume as they announced a successful debt restructuring on 85 percent of the senior notes due in May 2009.