Markets opened near flat after a quiet overnight session, but today’s cash-market open saw a surge in buying. In fact, the S&P 500 rallied over one percent from the opening print in a matter of about two hours, and stocks are only slightly off their highs of the day. There continues to be jawboning on both side regarding the Syrian situation, but investors have ignored those headlines for the time being. Stocks are being led by technology names today, as the Nasdaq is higher by over 1%. Tech giants AAPL and GOOG are very strong today, up a respective 2.2% and 1.3% for the session. The Russell 2000, Dow, and S&P 500 are all about 0.7% higher. Bonds are trading near breakeven, while yesterday’s move higher in metals has reversed today. Gold is currently lower by 1.6%, while silver is off by over 3%. Despite the big rally, there remains a bid in volatility. The VIX is lower by about 4% on the session, but still well above levels seen only a month ago.
CHART OF THE DAY
DuPont Co. (DD) – The science and technology behemoth has been strong this year, higher by about 30% since January, and currently trading near 13-year highs. The shares recently made new highs and have since pulled back near the 56 level, site of former resistance. This area could now act as support going forward. Despite its strength, skeptics remain. In fact, only 4 of the 17 analysts covering DD have the equity rated a “buy.” This creates the potential for future upgrades, which could act as a tailwind going forward.
I like a bullish entry here with a stop on a close below 56. I would initially target a move back to 60, with 65 as a stretch target.
WHAT I’M EXPECTING
Today’s highs on the S&P 500 closed the down gap from 8/27. I’m viewing this level as a key hurdle for the bulls to overtake. The recent rally was a little bigger than I expected, but I’m sticking with the bear case here for the near term. The next couple days should prove eventful, as there is a good deal of data to be released ahead of the weekend, including the August jobs report on Friday. Should the market respond favorably over the next two days and retake the down gap from last week, I will likely flip bullishly going forward.