The Dow popped to a triple-digit gain as one of the great uncertainties, the U.S. presidential election, hung in the balance. The major indices opened higher on a story, later retracted, by the Cincinnati Enquirer that Gov. Mitt Romney had a significant lead. But even after the retraction, the market retained most of its early gains.
At Tuesday’s close, the Dow Jones Industrial Average was up 133 points to 13,246, the S&P 500 gained 11 points at 1,428, and the Nasdaq rose 12 points to 3,012. The NYSE traded 671 million shares and the Nasdaq crossed 414 million. On the Big Board, advancers topped decliners by 2.4-to-1, and on the Nasdaq, advancers were ahead by 1.9-to-1.
On Tuesday, the Nasdaq confirmed that the test of support at its 200-day moving average at 2,982 has held. The rebound was accompanied by a strong positive — a buy signal from the MACD internal indicator. If the Nasdaq can overcome the resistance at the breakdown line at 3,039, the reversal of the near-term downtrend would have a high chance of success.
The NYSE Composite also flashed a buy signal from its MACD. This is very good news since the index is still trading within a bullish flag formation, and has held above its intermediate uptrend line and its 50-day and 20-day moving averages (blue and green lines).
Conclusion: Tuesday’s bullish display by most indices appears to be the result of the removal of a huge element of uncertainty, the imminent resolution of the presidential election. As of this writing, the winner has not yet been determined, but the election alone appears to be a catalyst for investors to take a “risk-on” rather than a “wait-and-see” approach.
Now if the president can take charge and be the ring leader under a new congressional big top, he may even get all of the clowns to work together. Who knows? We may even see a revived bull charge into the ring.
Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.