The Stock Charts Tell Everything
Stocks are advancing sharply across the board. This happened after the S&P 500 held the all important 1122 level. This level was the key low for the last three trading days. The move in the markets appears to be a melt up, as short covering starts ahead of a major speech by Federal Reserve Chairman Ben Bernanke on Friday. Last year, Ben Bernanke used this meeting to announce QE2. The markets are hoping for some positive statements this time around.
The move today took out a major pivot trend line to the upside. This line can be easily found by connecting the highs of the last three trading days. Today, after hitting the trend line and pulling back, the markets ripped through it. Technical traders are aware that this signals further upside. The markets are likely to trade choppy to higher through the Labor Day holiday weekend. This breakout of the trend line can be seen on the chart below.
The key winners today can be found easily. The easiest place to look is at the former strongest stocks like Amazon.com, Inc. (NASDAQ:AMZN), which is trading at $188.44, +10.90 (+6.14%) and Chevron Corporation (NYSE:CVX) which is trading at $95.90, +2.60 (+2.79%).
The biggest loser of the day is gold. The previous metal is seeing major selling as global fears decline. The SPDR Gold Trust (ETF) (NYSE:GLD) is trading at $180.74, -3.85 (-2.09%).