Beaten Down Stocks Get Big Bounces
Many recently beaten down areas of the market are seeing a positive move today on the back of a slightly weaker Dollar. The markets are floating higher as volume is about as light as imaginable. The SPDR S&P 500 ETF (NYSE:SPY) is trading at $128.96, +0.59 (+0.46%). Rare earth stocks and other metal plays are getting a bounce today. It was alerted on this very blog last week that Molycorp, Inc. (NYSE:MCP) was going to the 50 moving average on the daily chart at around $40.00. Today it hit the 50 moving average perfectly and from there took off to the upside, now trading back at $45.06, +2.07 (+4.82%).
Other commodity plays are bouncing. United States Steel Corporation (NYSE:X) is rising nicely today, trading at $54.68, +1.39 (+2.61%), while agriculture plays are also inching back up. The Mosaic Company (NYSE:MOS) was crushed last week, hitting the 50 moving average. Since then, it has bounced nicely, including the move today. MOS is currently trading at $76.21, +3.01 (+4.11%).
The markets are floating higher on two main factors. These two main factors are light volume and a weaker U.S. Dollar. Both are positive for the markets. Today is a rare pause from the wild trading of last week. Later this week, things will get wild again as earnings and economic news hits. In addition, on Wednesday, the Federal Reserve will release their policy statement. This will be key in the markets and likely to cause a Dollar reaction. The Dollar has fallen sharply over the last two weeks.