The S&P drifted higher early Wednesday but is fading into the lunch-time hour following the two-day extension to multi-year highs to start the week. The market’s seven day win streak now looks in jeopardy. Bulls can’t complain though, the market has responded to every obstacle or set-back to resume the uptrend since September.
Fed Chairman Ben Bernanke’s House testimony lacked the fireworks of some previous visits, as he repeated his view that the recovery is not ‘truly established’ until more meaningful job creation starts to occur. The dollar dropped during Bernanke’s typically dovish testimony. Despite the absence of sharp rhetoric at the hearing, new Fed oversight committee chairman Ron Paul held his first meeting as he seeks to discredit and disband the central bank.
Gold and silver have been quiet, and remain slightly in the red as they digest moves from the last couple weeks. Oil has also been weak, and today’s pullback could be a great opportunity to get involved for the next move higher, says Marc Sperling of T3Live.com. Banks have also acted poorly today, but should see higher prices in the near future. Rare earth stocks have been a mixed bag. Avalon Rare Earth Metals Inc. (AVL) looked to be building on yesterday’s explosion early, testing near all-time highs, but has pulled in sharply in the last couple hours. China Shen Zhou Mining & Resources Inc. (SHZ), the pick of the litter this morning by Scott Redler of T3Live.com, has held up after making a move early in the morning trade.
Big Cap Tech Shows Strength
We have seen weakness in many areas, but some notable big cap tech leaders have remained strong despite headwinds. Apple Inc. (AAPL) is making new highs once again, with the average analyst price target in the mid $400 range. The stock at current prices remains undervalued, and investors are ignoring its extended chart in order to get in on the action.
Baidu.com, Inc. (BIDU) was a gap and go this morning after being upgraded at HSBC, continuing its strength since a sensational earnings report at the beginning of last week. The Chinese Google continues to trade a fairly high multiple, but growth continues to justify the lofty valuation to this point. Netflix, Inc. (NFLX) is another highly valued, controversial stock that continues to confound its legion of naysayers. The media pioneer gapped up, like BIDU, after another stellar earnings report two weeks ago, and has continued to make new highs. It pushed through yesterday’s all0time high before pulling off a bit.
*DISCLOSURE: Scott is long GLD, SHZ: Short SPY. Marc is long GLD, BIDU; Short SLV.
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