Day Traders Diary


U.S. stocks jumped on the open Monday, following gains in stock futures and Europe markets, after a weekend pledge by French and German leaders to devise a plan by early November to support European banks and debt-strapped sovereigns. The Dow Jones Industrial Average rose 176 points, or 1.6%, to 11,279. The S&P 500 gained 22 points, or 1.9%, to 1,178. The Nasdaq Composite rose 45 points, or 1.8%, to 2,523. On Sunday, French President Nicolas Sarkozy and German Chancellor Angela Merkel said they agreed on the need to strengthen European banks but provided few details. Even so, the financials look good. The European and US banks are all trading up 2% to 3%. Here's how bad things have become. Friedman Billings Ramsey put out a note indicating that the major banks are all 40% undervalued yet the analyst said to stay on the sidelines. Crazy. If the financials are trading up that means all the sectors are higher. Every Dow component is higher. In the tech space Micron and KLA Tencor are higher on upgrades. KLA Tencor and Intel traded higher on Friday even though it was a down day. The chip and chip equipment stocks continue to perform well. Yahoo is up 3% on more rumors of a takeover. BMC Software is one of the few techs lower on a downgrade. The commodities are performing well. Potash is up 5% on an upgrade. Transocean is jumping 5% on news they are not liable for a faulty deepwater well in the Gulf of Mexico. Through the first half an hour the Dow pushed higher rising 236 points. The Nasdaq jumped 60 points. Light volume day with most everything closed except for the stock market. Through the morning the averages pushed higher. The Dow rose nearly 300 points as one component, IBM made a new 52 week high. The Nasdaq is up 73 points or neatly 3%. The techs are catching a bid. It'd be nice to have a fourth quarter tech rally. Into the afternoon the volume dried up as the averages moved sideways near the highs of the day. In the last hour the averages drifted a little lower only to rally into the close finishing on the highs of the day. A great way to start the week. The Dow Jones Industrial Average finished up 330 points, or 2.97%, at 11,433. More than 5% gains in Bank of America and J.P. Morgan Chase led advances for all 30 blue-chip components. The S&P 500 added 39 points, or 3.4%, to 1,194, led by a 5.1% rally in financials. The Nasdaq Composite gained 86 points, or 3.5%, to 2,566. It was the biggest percentage gain for S&P 500 and Nasdaq since Aug. 23, and the biggest gain for the Dow since Aug. 11

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