The sight of Adelphia executives being led away in handcuffs and reassurances from JP Morgan that the company isn’t in financial trouble sparked the best gain for the Dow industrials in 15 years on Wednesday.
The ISDEX http://www.wsrn.com/apps/ISDEX/ gained 4 to 96, and the Nasdaq soared 60 to 1290. The S&P 500 surged 45 to 843, and the Dow soared 488 to 8191. Volume rose to 2.77 billion shares on the NYSE, and 2.45 billion on the Nasdaq. Advancers led 20 to 13 on the NYSE, and 20 to 14 on the Nasdaq.
After the close, AOL topped estimates.
During the day, Amazon and Expedia
slipped despite better than expected results.
Openwave fell 27% despite matching estimates.
But Applied Micro , Newport
, Websense
, Storage Tech, Netscreen
, Advanced Fibre
, Ticketmaster
, NetIQ
, and Corning rose on their earnings reports.
Microsoft bounced at 41.41, just above its January 2001 low, and finished up 7% on the day.
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Well, we got the bounce almost exactly where we were looking for it: just above 7500 on the Dow, 776 on the S&P 500, and just below 1200 on the Nasdaq, all very important support levels, and all reached simultaneously this morning. At the same time, we got a spike in the VIX up to September’s high of 57, showing a nice level of fear. It would be nice to see a retest of the lows before this rally continues, but the market may have other ideas. Another 80% upside day tomorrow would likely be bullish for at least the short-term, and it’s hard to find major resistance until 9000 on the Dow and 950 on the S&P. The one negative today is that breadth was not nearly as bullish as it should have been after the drubbing the advance-decline line took the last couple of days. As we noted last night, we were missing some ingredients for a major bottom, most notably a string of 90% downside days, but we had enough for a good rally. That rally may have begun. We’ll post more analysis tomorrow night.
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