DIA +.28%, SPY +.42%, QQQQ +.84%
10-Year Treasury -3/16 to yield 4.11%
Stocks continued their weeklong rally today. Most impressive was the NASDAQ's gain. The technology market has languished for some time. Continued buying interest in this area of the market is vital for the markets to move higher from their current levels. The markets shrugged-off the Philly manufacturing index's lowest reading in two years and 4th strait decline of the index of leading indicators. All markets closed near their session highs, which is another bullish sign. However, don't be surprised by a sell-off tomorrow as traders start to take some profits from this week's rally.
The 10-year bond fell 3/16 to yield 4.11%. This is simply a sell-off from an overbought situation. The 10-year Treasury is trading near 4%, which is the yield Greenspan called a "conundrum" when he testified before Congress.
Oil lost 33 cents to close at $46.92. US supplies are at 6 year highs. This is easing trader's fears about a summer-supply crunch. In fact, some stories are speculating there may be an oil glut in the US. Two days ago, Saudi Arabia stated it would not lower supply in the near future, even though oil's price has dropped around 10% in the 10 trading days. However, OPEC's minister today stated the cartel would consider production cuts if oil stockpiles remain at high levels. From a technical perspective, oil's price is approaching a Gann ray, indicating the sell-off may slow near $46.75.
The dollar rose .35% versus the Euro and .60% versus the Yen. Today's report of an unexpected 20,000 drop in weekly unemployment claims helped to fuel the rally. Additionally, investors sold Japanese stocks last week, indicating an overall souring of investor sentiment towards Japan. Since the beginning of May, the dollar has rallied 3% versus the Yen and 1.5% versus the Euro indicating a solid dollar rally is in place. The primary reason for this rally is the perceived higher growth rate of the US economy relative to Europe and Japan.
