Stock Market Rally Could Be Seen On Charts Last Week
The triangle pattern broke to the upside on the S&P 500 today. The SPDR S&P 500 ETF (NYSEARCA:SPY) is trading at $128.21, +2.71 (+2.16%). This breakout was expected based on the bullish pattern formation seen last week. In addition, new money flow was likely to enter the market on light volume. The combination of all these factors spelled rally.
January Effect plays are starting to run. What is a January play? These plays are beaten down stocks that are trading near or at their 52 week lows. In December, tax loss selling keeps pressure on them. Once that pressure subsides, the January Effect takes place. They bounce back. A good example of these types of plays are Renren Inc (NYSE:RENN) which started its run last Friday. E Commerce China Dangdang Inc (ADR) (NYSE:DANG) is another dead bottom China play that has seen a major rebound as tax loss selling has come to a close. Two other plays to watch are Smith Micro Software, Inc. (NASDAQ:SMSI) and THQ Inc. (NASDAQ:THQI). January Effect plays are great ways to start the year off right. The upside potential is huge on these.
Oil is having a big move today on continued concerns with Iran. In addition, global optimism is back in full force. The United States Oil Fund LP (ETF) (NYSEARCA:USO) $39.39, +1.28 (+3.36%).