daytrades march 17 morning

Morning HLL & All,



One worrying factor is this SPX daily chart which closed last nights session below resistance, albeit just but nevertheless below. Not sure whether this means much but will keep me cautious. I think the US were just getting some back from the night before after a European spokesman put out some misguided information relating to Japan which was corrected and understood to be misleading but only after the market closed. (Source : Squawk Box CNBC)

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Wall Street recovers, climbs higher
Published 10:42 PM, 17 Mar 2011 Last update 6:20 AM, 18 Mar 2011

Reuters

NEW YORK - Wall Street rebounded after three days of declines, but investors were not convinced that the advance would last as concerns about Japan's nuclear crisis persisted.

All three major US stock indexes recovered from Wednesday's lows, which had put both the benchmark S&P 500 and the Nasdaq in negative territory for the year.

The S&P 500 climbed back into the black for 2011 with Thursday's gain. But the Nasdaq could not hold on to its morning move back into positive territory. By early afternoon, the Nasdaq was negative again for the year.

But while the day's bounce relieved some worries about the market's recent slide, it did not change the view that a correction is under way.

"As the headlines come out of Japan, there are more nervous traders liquidating their long positions in futures put on this morning," said Steve Leuer, stock-index futures trader at X-FA Trading firm in Chicago.

From a chart standpoint, "I don't see anything right now that suggests that the near-term decline is over," said Chris Burba, short-term market technician at Standard & Poor's in New York.

The recent declines followed a rally of nearly six months in stocks. That rally in itself has prompted calls for a market correction.

The CBOE Volatility Index VIX, Wall Street's fear gauge, fell 9.1 per cent to 26.74 as stocks rose, but it was still at a high level, compared with the recent average of about 20.

On Thursday, natural resource stocks helped lead the market as commodity prices rebounded. Tensions in the Middle East and North Africa drove oil prices up sharply. Brent crude for May delivery gained $US4.37 to $US114.97 a barrel.

Cliffs Natural Resources Inc rose 6.2 per cent to $US88.89 while Chevron Corp gained 2.6 per cent to $US102.11.

The S&P energy index shot up 2.7 per cent, leading gains in the S&P 500, even though the prospect of higher fuel costs in general have hurt stock investor enthusiasm in recent weeks.

A correction at this point could be short-lived, some analysis suggests.

Cleveland Rueckert, an analyst at Birinyi Associates Inc. in Stamford, Connecticut, said in a note: "Since 1945, five per cent declines that occur during a broader rally last an average of 41 days and decline 8.29 per cent.

"If the averages hold, the S&P 500 will bottom at 1,232" on March 31, Mr Rueckert wrote.

Economic bellwether FedEx Corp , the world's largest cargo airline, forecast improved revenue, boosted by strong demand. The stock rose 3.5 per cent to $US88.25 and helped lift the shares of United Parcel Service Inc , the largest package delivery company. UPS stock gained 2 per cent to $US71.81.

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