Swing Trading Strategies & Stock Picks Since 2003

DJIA Industrial Average

Sept 3

Open: 10,321.92

High: 10,451.15

Low:   10,321.84

Close: 10,447.93

Change: 127.83 (1.26%)

RSI: 68

MACD (Delta): 4.73

Strategy: The US markets remained strong Friday for the fourth successive day, as the investors cheered the better than expected monthly employment data and an improved home sales number, reflected by the pending home sales. Though the recovery process is on in US economy at a low pace, the market sentiment has still improved by taking cues out of the same.  

Commentary

Stocks advanced further in US Friday, as the investors braced the improved hopes created by private sector adding 67,000 jobs. This was higher than 44000 fresh jobs that were expected to be created by private sector last month.

The Dow Jones industrial average gained 127.83 points, or 1.26%. The S&P 500 gained almost 14 points, or 1.3%, and the Nasdaq composite also advanced 33 points, or 1.5% in the session of buoyant trade.

The better-than-expected jobs report came on the heels of improved manufacturing data earlier in the week, helped ease some concerns about the economy. But a report on activity in the services sector came in weaker than expected.

The economy lost 54,000 last month. That compared much better with 131,000 jobs shed in July.

However, the data in the day, which was the Institute for Supply Management's (ISM) services index, slipped to 51.5 in August from 54.3 in July. Economists had forecast a decline to 53.

The day was marked by broad based advances, when all the 30 Dow constituents edged up higher in the session.

The VIX, an indicator of volatility and fear in the market slipped over 8% to 21.43.

Major Advancing Dow constituents included American Express 2.25%, Boeing 1.97%, Caterpillar 2.25%, IBM 2.03%, JP Morgan 2.65% and Walt Disney 2.24%.

Amongst the different sectors, the rally was spearheaded by Financials 2.2%, Tech 1.7%, Consumer Discretionary 1.5%, Industrials 1..4% and Materials 1.3%.

On the M&A front, Goldcorp slipped 2.3% after the gold miner agreed to acquire all outstanding shares of Andean Resources for $3.4 billion. Andean's principal resources in gold are located in Argentina.

Shares of Take-Two Interactive Software Inc. rallied almost 10% after the company reported an unexpected quarterly profit and gave a positive guidance for full year.

With four days of strong rebound in this week, the DJIA regained back into positive territory for the year to date, after lingering on to losses for prolonged period.

Goldman Sachs gained 5.4% as financial stocks led the day's gains. Morgan Stanley gained 3.8%, while Dow constituent J.P. Morgan Chase also advanced 2.7%.  American Express also remained strong in the session.

The dollar fell against the euro and the British pound but was higher versus the Japanese yen.

Oil futures for October delivery fell 64 cents to $74.38 a barrel.

Gold for December deliveries fell marginally to $1251.10 per ounce.

The Day Ahead

Monday

Personal Income and Outlays for July