Day Traders Diary
8/9/11U.S. stocks opened sharply higher on Tuesday as Wall Street reclaimed a piece of the prior day's massive loss. The Dow Jones Industrial Average rose 128 points to 10,938. The Standard & Poor's 500 Index added 15 points to 1,135. The Nasdaq Composite Index climbed 38 points to 2,396. Plenty of upgrades this morning which is good, but market psychology is ruling this market. There hasn't been a specific catalyst for this morning's bid in equities, so the move can simply be attributed to exhausted selling and bargain hunting after some extreme volatility. Additionally, there may be an element of a pre-FOMC bid, with some expecting the committee to address the recent market volatility. Most stocks are bouncing back after getting slammed yesterday. A few stocks are lower once again today including Fossil down 20% following disappointing earnings. Dish Networks is also lower following earnings. Through the first hour the averages vacillated back and forth, but remained strong. That's a good sign. After the first hour the Dow was up 200 points. The Nasdaq rose 70 points. So far so good. Through the morning and into the afternoon the averages moved sideways near the highs of the day. In the afternoon heading into the Fed meeting, the averages started to pull back. The Fed's statement was rather depressing indicating that the economy will remain weak for an extended period of time. The Fed indicated they would leave rates at a low level until mid-2013. That's not a good sign. The Dow rose 200 then dropped into the red by 70 points only to rebound to the unchanged level all within 10 minutes. After that first 10 minutes the averages moved lower once again. Over the next hour, into the last hour, the averages slowly improved rallying over 100 points. In the last 40 minutes, the averages kicked into overdrive, rallying 200, then 300, then 400 points into the close. The Dow Jones Industrial Average ended up 429 points, or 4%, at 11,239, its steepest rise since March 2009 and a recovery from a more-than 200 point intraday loss. The S&P 500 added 53 points, or 4.7%, to 1,172, also its best performance since March 2009. The Nasdaq Composite added 124 points, or 5.3%, to 2,482.
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