Today's action 6/15/07..
Stocks surge on higher volume.
Market is in confirmed rally.
Stocks notched broad gains in higher volume Friday, putting the marketâs rally back on track.
The Nasdaq gapped up at the open. It held its gains through the session, closing up 1.1%. The Dow climbed 0.6%, the S&P 500 0.7% and the NYSE composite 0.9%.
Volume vaulted 41% on the NYSE, 27% on the Nasdaq.
Fridayâs gains in higher volume marked a change of course for the market. On Wednesday and Thursday, stocks bagged sizable gains but in lighter trade. Gains in higher volume typically point to greater interest by big-money institutional investors, a must for a rally to succeed.
The dayâs action did come with a caveat: quadruple-witching options expiration, an event that can lift volume totals. But the market had multiple other factors working in its favor.
The major indexes scored solid price gains. The Nasdaq hit a multiyear peak. Other indexes closed just short of new highs.
The action of leading stocks further underscored the marketâs strength. The IBD 100 galloped 1.5%. That marked the third straight time that the IBD 100 had outperformed the broad S&P 500.
Todayâs Market Pulse reflects the marketâs change of course, with the market back in a confirmed rally. That means investors can resume looking for new buys.
But donât turn overeager. Target only top-quality stocks. Buy only as stocks break out of well-formed bases or cross secondary buy points in robust volume. Itâs better to own a few top-tier leaders rather than dilute your portfolio with a mess of low-grade stocks.
If you botch a buy, cut your losses quickly. Ditch laggard stocks that arenât working. Look for chances to add shares to strong, winning positions.
Following a sound set of buy and sell rules is the hallmark of successful investing in any market climate.
Fridayâs rally included a strong showing among small-cap stocks. The S&P 600 motored 1.2%.
Highly rated midcap stocks such as Green Mountain Coffee Roasters and Russian broadcaster CTC Media sprung out of short consolidations.
MasterCard, a larger institutional favorite, bolted 5% to reach an all-time high.
Another round of tame economic data helped stoke the rally.
The consumer price index rose 0.7% in May, topping estimates. But the core CPI, which strips out food and energy prices, climbed just 0.1%, below views.
That reading echoed Thursdayâs core PPI data. It also helped calm the inflation fears that gripped investors and briefly cast the marketâs rally into doubt.
The yield on the benchmark 10-year note sank to 5.15% from 5.22% Thursday, after surging to 5.30% earlier in the week. On the futures market, the probability of a Fed interest-rate hike fell to 12% from 24% Thursday. The ebbing inflation fears fueled a brisk rally for the week. The Nasdaq advanced 2.1%. The NYSE composite added 1.9%, the S&P 500 1.7% and the Dow 1.6%.
