Midday Action: November 9
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November 9, 2009
An economic pledge from the G-20 stimulates bulls into action out the gate Monday. As of 10:55 ET the SP-500 (SPY) is up 1.35% on, once more, weaker volume and the Jones' enjoying a celebratory bid to fresh rally highs while growth traders stand pat and likely frustrated.
Four days of lighter volume rallying and potential carving out of a right shoulder have been "classically" undone like so many other bearish technical nuggets of the past several months. That being said, Monday's jumper of nearly 1.50% and pattern crusher has the G-20, largely to thank.
Finance ministers of the international body announced fresh vows over the weekend to keep stimulus plans in effect until a "recovery was reassured" according to Reuters or until all nay saying bears are put into hibernation per this market observer.
Sympathetic or more aptly, eager bids, have filtered into less risk-averse assets (once more) which stand to benefit from the unified efforts of global leaders. As much, higher yielding commodity-linked currencies and associated "picks and shovels" (GDX, OIH, SLX, XLE) stocks are amongst Monday's relative strength percentage leaders and at the expense of a pressured and lowly US Dollar.
Spearheading, Dow component and heavy machinery giant Caterpillar (CAT) is bulldozing bears with its lift of 3.65% at 59.70 within a three week high-level consolidation pattern. Similarly, industrial metals giant Freeport McMoran (FCX) is up 4.50% at 83.15 and nearing its prior and pattern highs.
Also enjoying support status with market bulls, some "Merger Monday" style reports have aided and abetted today's bid. Traders are awaiting a formalized hostile bid from Kraft (KFT) for Britain's Cadbury (CBY) in a deal valued at near $16.7B.
Separately, GE's (GE) NBC Universal unit and Comcast (CMCSA) have shaken hands on a joint venture worth about $30.0B after lengthy talks. As much, shares of GE are continuing to bring good things to life for shareholders for a second straight session of relative strength performance, up 3% at 15.80. As for CMCSA, shares are up 1.85% at 14.85 and confirming weekly doji support and reclaiming the 200-Day SMA within its less-spirited uptrend from the market's March lows.
Elsewhere and in more spots than Monday's bulls would care to admit, there is still some "sell-e-brating" going on despite the reinvigorated green shoots efforts within the broader market. One boat not being floated in the face of the rising tide is dry bulk shipper TBS Intl (TBSI).
The company, along with fellow one-time growth standout and alt energy concern Energy Conversion (ENER) both posted worse-than-expected losses which haven't been worthy of lifting prices or sentiment in either name and despite each being closer to multi-year lows than even their year-to-date highs.
And for current growth bulls, "Best in Group" (per IBD) meat and food products producer Zhongpin (HOGS) is causing some upset stomachs as well. The China-based concern posted record Q3 profits and sales but reduced guidance due to pork prices which have stalled of late after rising during 2009's first half.
Technically, Monday's slip of 6.75% in HOGS puts shares below its coveted 50-SMA after gapping below a hopeful multi-day consolidation. The tight action had been using the line as support in front of today's release after correcting by roughly 20% from its recent highs near 16.75. Hmm, I guess you could say there's no "MOOyah!" going on with those bulls.
Chris Tyler
Senior Staff Writer & Options Strategist
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