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%
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%
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.
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…
As we stated yesterday, we’ve begun establishing our seasonal position in both the S&P 500 and the Nasdaq.
You’ll receive the October outlook tomorrow morning. Stay tuned!
*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