Monday, September 28, 2009

Long at 1041 : Target filled

Long at the close of Friday at 1041 (ESZ9) E-Mini S&P 500 Futures.

First Target reached at 1060 for + 21 Points profits. Daily price action found support exactly at the 20 DMA. The Market Timing Strategy worked like a champ again !

The S&P 500 generated a volume of 3,017 million shares today, 29% above the index's average daily volume output seen over the past three months.

Today's rally has largely been attributed to a recent increase in merger and acquisition (M&A) activity. Three such M&A deals were announced today: Xerox will acquire Affiliated Computer Systems for $6.4 billion in cash and stock; Abbott Labs will acquire Solvay's drug business for 6.6 billion in cash; and finally, GenTek will be taken over by American Securities who will pay $38 per share for the company.

Market observers comment positively on the current takeover and merger activity, saying that it is an important milestone in the recovery of the financial system. During the financial crisis, such activity had slowed to a mere trickle.

Financials were the best performing market sector today, up a hefty 3.4%. This is the sector's strongest single-session advance (on a percentage basis) in roughly 2 months. Within the financial sector, multiline insurers gained 6%.

Despite today's impressive upswing, market commentators note that there did not appear to be much conviction behind the move with total trading volume on the NYSE coming in well below one billion shares, its lowest level in a month. However, it must be noted that many market participants were away for Yom Kippur, the holiest day of the Jewish calendar. The third-quarter of 2009 ends on Wednesday and may have prompted some money managers to play catch up with the market. The Dow is currently up 16% for the quarter, on pace to achieving its best three-month stretch since the last quarter of 1998 (where it gained more than 17%).

No comments:

Post a Comment