Yesterday I thought we had a good shot at moving higher, but I sure wasn't expecting the nice 148 point pop we got in the Dow and I really didn't think we'd break the 12K barrier today. But we did, closing at 12,040. Notably, the S&P also closed above its own psychological level of 1300. Both of these numbers now become support. But because we've now gotten fairly extended again from the daily Dow pivot at 11,867, I'm not looking for another big gain tomorrow. However, I do think we can still end tomorrow up a bit from here. There is no significant resistance now between here and 13,000, that being the spring highs of 2008.
There's not much guidance from the futures right now. After climbing most of the evening, they're all down just slightly at this point (1:30 AM). But the VIX, which peaked on Friday did in fact fall considerably since then, as I expected. Once again, as I mentioned, when the VIX hits its upper Bollinger band, look for higher stock prices in a day or two. Right now, the VIX is still less than halfway back down to its lower Bollinger band, or even the point it was at before last Friday (just under 16). So that implies that stocks still have room to run higher tomorrow. And finally, we note that the second trading day of February is historically a good one (though not as good as the first day). We'll see.
Trades
Today I added to my position in DHY at 3.04 for my low price/high yield portfolio. I sold my TIE at 19.28; it closed at 19.37. And I bought a bit of C at 4.87.
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