U.S. Debt Deal Hopes Trigger the 2nd Best Stock Market Gain of 2013

By: PhilStockWorld

Courtesy of Doug Short: Early hints of negotiations over the debt ceiling sent today’s market on a tear. The S&P 500 opened at its intraday low and closed at its intraday high for an impressive gain of 2.18%. This was the biggest rally since its 2.54% surge on January 2nd in celebration of dodging the Fiscal Cliff. Of course, that rally came with an actual resolution. Today’s relief rally was closer to a “buy the rumor” event. Perhaps the market will now pay closer attention to earnings season, which got underway this week.

Here is a two-hour chart of the since early September showing the rally to the all-time high on September 18th and the selloff to the -4.06% trough on Tuesday. Today the S&P 500 is up 0.65% for October, thus erasing all government-closure losses.

Here is a daily chart of the year to date. The index is now back above its 50-day price moving average. Volume was strong, but a tad off yesterday’s indecisive 0.06% gain.

The S&P 500 is now up 18.68% for 2013 and 1.91% below the all-time closing high of September 18.

For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.

- Phil

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

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