By: John Darsie of T3Live
The market built on yesterday’s bounce, breaking above the pivot high from Friday as the dollar pulled off for the second day in a row. Last week a combination of factors had investors souring on the market. Troubling economic data points, the end of QE2, and new-found strength from the dollar triggered a sell-off in leading momentum stocks, and most notably in commodities. With European officials striking a surprisingly dovish tone, the carry trade with a weak dollar may be starting to unwind. Traders will be watching to see whether the big jump in the greenback last week was a flash in the pan or a sign of things to come.
Silver bounced slightly after overnight gains, and the iShares Silver Trust ETF (SLV) still sits in last Thursday’s gap. Oil also continued to bounce back after last week’s massive sell-off, erasing overnight losses for a 0.5% gain despite margin requirement hikes. In the momentum stock arena, Amazon.com, Inc. (AMZN) and Wynn Resorts, Limited (WYNN) highlighted our watchlist, jumping 1.6% and 3.5%, respectively. Both are stocks that surged after strong earnings and are holding new upper level bases.
