Monday was a relatively slow news day but that didn't stop the bulls from running the table. Markets were higher around the world as investors reacted to positive comments from the G20 on Saturday. The Group of 20's finance ministers said they would keep their stimulus programs active and keep interest rates low until the recovery was firmly in place. This pushed the U.S. dollar lower, which is fueling a strong rally in commodities. Banks were also performing well around the world.
Asian markets were higher with the Hong Kong Hang Seng posting the best performance with a 1.7% gain. The rise was enough to push the Hang Seng back above the 22,000 level. The Chinese Shanghai index only rose 0.3% but it was the seventh gain in a row. Chinese stocks might see some volatility this week as investors react to the latest round of economic data due out on Wednesday. Meanwhile the Japanese NIKKEI index managed a 0.2% gain.
The rally was stronger in Europe with many stocks gapping open higher. The trend was similar with commodity stocks leading the rally followed by a widespread rally in banks. The English FTSE and the French CAC-40 both rose 2.1%. The German DAX surged 2.4%. In Britain chocolate-maker Cadbury Plc rejected Kraft Foods Inc.'s $16.4 billion acquisition offer calling it too low.
The U.S. dollar's bearish reversal lower has pushed gold futures to a new all-time high nearly hitting $1,110 an ounce this morning. Gold is currently up about $6.00 to $1,101.70. The XAU gold & silver index is up 4.0% today. Freeport McMoran (FCX) is surging 4.6% and nearing potential resistance at its October highs near $84 a share. Crude oil has erased most of Friday's losses with a 3.0% gain and a rally back toward $80 a barrel. The OSX oil services index is up 3.1%.
The major U.S. indices are breaking out over some short-term resistance. The S&P 500 index is up 1.89% at 1,089 and pushing past a small cloud of moving averages and both the 1075 and 1080 levels, which could have been short-term resistance. The next obstacle for the bulls is the 1100 mark. The NASDAQ composite is up 1.6% and back above its key moving averages. The Dow Industrials are up 1.8% and breaking out to new 2009 highs above 10,200. Small caps are seeing a strong bounce with a 1.7% gain but the Russell 2000 could have significant resistance near the 600 level and its 50-dma. The transportation index is breaking out past any technical resistance at its 50-dma. The SOX semiconductor index is seeing a big move with a 2.9% rally toward the 310 level.
Let's take a quick look at charts for the major averages:
Chart of the S&P 500:
Chart of the NASDAQ:
Chart of the Dow Industrials:
Chart of the Russell 2000 index:
Scanning the OptionInvestor.com play list for any significant moves I see CNQ up 4.5%. Unfortunately the stock gapped open higher this morning. The GLD hit $108.75 this morning. Naturally the big rally today is bad news for most of our put plays yet BIIB is showing relative weakness with a 1.6% decline. We'll start closing some of our other put positions in the newsletter tonight.