Reflections on Volume

Big volume without further upside equals distribution
Big volume without further downside equals accumulation

Volume tends to peak at turning points
Volume often precedes price movement
Volume is a relative study

Thursday, October 13, 2011

Wall St. gains on euro-fund optimism, Dow up on year

NEW YORK (Reuters) - U.S. stocks jumped 1 percent on Wednesday, pushing the Dow into positive territory for the year, as the euro-zone rescue fund was set to get approval from all EU members.

Momentum buying was partly in play, analysts said. The S&P 500 has gained 13.5 percent from the intraday low hit last week on Tuesday and was on track for its largest seven-day rally since March 2009.

"It feels as though the market is experiencing the possibility of a melt-up," said Hank Smith, chief investment officer of Haverford Trust Co. in Philadelphia.

"You've got a lot of money on the sidelines that just didn't want to take the risk of being invested. That could come back in."

Slovakian lawmakers struck a deal to ratify more powers for the euro zone's rescue fund, known as the EFSF, effectively ending a crisis that threatens the euro's survival and which has weighed on stocks and other risky assets for months.

Slovakia is the last country in the 17-member currency zone left to approve the revamped EFSF.

Bank shares led the advance again, with the KBW Bank Index (Philadelphia:^BKX) shot up 4.1 percent. Citigroup (NYSE:C) gained 6.2 percent to $29.54.

The Dow Jones industrial average (DJI:^DJI) was up 159.92 points, or 1.40 percent, at 11,576.22. The Standard & Poor's 500 Index (SNP:^GSPC) was up 18.51 points, or 1.55 percent, at 1,214.05. The Nasdaq Composite Index (Nasdaq:^IXIC) was up 31.46 points, or 1.22 percent, at 2,614.49.

The S&P 500 traded above 1,200 for the first time in three weeks, taking the benchmark near the upper end of a range it has been stuck at since early August.

If the index is able to stay above resistance at 1,215, that would be seen as a bullish signal, analysts said.

Among earnings, PepsiCo Inc (NYSE:PEP) rose 3.7 percent to $63.19 after it reported slightly better-than-expected earnings and affirmed its full-year target. But Alcoa Inc (NYSE:AA) fell 2.5 percent to $10.04 and ranked as one of the biggest drags on the Dow, a day after reporting results.

(Reporting by Caroline Valetkevitch; Additional reporting by Rodrigo Campos; Editing by Jan Paschal)

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Note: Downward trend channel broken upwards!!

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