News:
Early yesterday morning, the Bank of England sent shockwaves of buying through the markets with a surprise announcement.
The declaration is simple. The Bank will…
- Buy bonds “on whatever scale is necessary” to stabilize the bond markets.
- It also “postponed” selling operations.
In simple terms, the UK’s central bank has flipped from a seller to a buyer. And they, like The Fed, have unlimited funds.
The market cheered the news.
Indexes soared and closed near their highs…
- Dow Jones +1.9%
- Nasdaq +2.1%
- S&P 500 +2.0%
- Russell 2000 +3.2%
Looks great, right?
Let’s put things in perspective.
- Single-day gains like this are not typical bull markets.
- At writing, futures are down about 1%
Sector Round-Up
There wasn’t a red spot in the house as all 11 sectors gained over 1%.
At the top…
- Energy (XLE) +4.4%
- Communications (XLC) +3.4%
At the bottom…
- Utilities (XLU) +1.1%
- Technology (XLK) +1.1%
Hap Happenings
Porsche (PAH3.DE) debuted today on the German market.
- Shares were priced near the top of the range, giving the company an initial market cap near $80 billion.
- At writing, shares are down about 8%.
Shares of Biogen (BIIB) soared 40% after positive results from phase 3 trials of its up-and-coming Alzheimer’s drug.
- The stock also received a slew of analyst upgrades
- The highest projection is $360, a 30% upside to yesterday’s closing price.
- After the surge, the stock price is now near flat over the past 12 months.
Technicals:
The VIX rejected higher levels…
The fear gauge started the day near the critical level of 35 but declined throughout the day. This is generally a positive development for the bulls.
It’s likely the VIX has now topped out.
Our other signals…
- RSI levels snapped back to neutral
- The Put-to-Call Ratio is still oversold
As we stated yesterday, we’ve begun establishing our seasonal position in both the S&P 500 and the Nasdaq.
Timing:
You’ll receive the October outlook tomorrow morning. Stay tuned!
Watchlist:
*Low Float
^Open Position
*BEAT support at $3
*PEPG resistance at $12
HROW resistance at $10
LGHL support at $2
SAVA resistance at $50
DCPH support at $17
RVNC support at $24
AMPS on watch
FREY support at $14
HLIT support at $12
CANO support at $8, resistance at $9