Let’s face it — investors have mostly been sitting on the sidelines this week after last week ended with two high-volume sessions, one giving and one taking away.
In the meantime, stocks have to do something, and we’re left on Tuesday, like on Monday, reverting to the inevitable meltup of most assets that are not the dollar.
On Tuesday, that meant a return for the major indices to a level within about 1% of the 2011 highs that were set last week before the air was let out of most trading instruments – oil and silver, most notably.
The Dow Jones Industrial Average rose 76 points to 12,760, the Nasdaq gained 29 points to 2872 and the S&P 500 rose 11 points to 1357.
And it’s this sort of dynamic that is largely responsible for pushing stocks one way or another these days. (Despite the possible synergies and optimistic atmosphere being gleaned from a headline-grabbing acquisition, it’s hard to believe that any move by Microsoft (NASDAQ:MSFT), even one as possibly right-headed as its acquisition of Skype, has much cache with investors, even those who like tech stocks. This is the old-school company that no longer “gets it,” right?”)
No, it seems more likely that much as the parabolic rise of silver, gold and crude oil (and stocks, if you’re of that bent), an eventual correction also would have its days off. Bubble-icious as it may be (have been), a 30% drop in silver in a week is a lot to ask.
Part of that reverting to form was another move lower by the dollar, which did a lot to revive commodities (oil rose 1.3%, while silver gained 3.7% — both it and gold have now risen for three straight sessions; hey, just like stocks!).
Tuesday also saw a return to form of the small-cap trade. The Russell 2000 Index jumped 1.5%, and has now gained 3% in the past three sessions, as investors once again try to find smaller energy and precious-metal plays.
As with all volatile markets, short-term swings can often seem as significant as longer-term trends. But today’s trend can always become tomorrow’s reversal. And vice-versa.
