After yesterday’s big down move, markets are higher today amid very low volumes across all indexes. The news and speculation regarding the Syrian situation continues to grow, but buyers have stepped in for the time being and are propping up markets. Today’s leader is technology, as the Nasdaq is nearly 0.8% higher on the session. The Russell 2000, Dow, and S&P 500 are each about 0.5% higher. Bonds are getting hit, down about a percent on the session, while gold is seeing more upside, and the miners are bouncing after yesterday’s swoon.
CHART OF THE DAY
Principal Financial Group (PFG) – The investment and insurance company has been on a tear this year, higher by about 40% since January. The shares recently reported blowout earnings, and the shares gapped significantly higher. Since then, PFG has retraced that move to fill the earnings gap, and is showing signs of life today. Coincidentally, PFG is bouncing near its 50-day moving average, a trendline that has helped guide it higher this entire year, and could act as support going forward.
I like a long entry here with a stop on a close below 39.50. I would initially target a move back to 44, with 50 as a stretch target.
WHAT I’M EXPECTING
I’m looking for today’s bounce to continue short-term, but then for markets to reverse and continue their trek lower toward 1600 on the SPX. The action between 1640 and 1650 on the S&P 500 will be key, as it could provide some nice bearish setups or invalidate my bearish thesis.