This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Rumors of QE3 Spark Rally: Dave's Daily


More than $25 billion in POMO was added to markets over the last week. Cash at Primary Dealers was piling up. As markets were becoming short-term oversold it was time to deploy it and seek alpha (buy stocks). There wasn't any seriously positive news to spark a rally unless you believe high energy prices are good for consumers. But, some permabulls got the rumor going that more QE is coming since economic data has been terrible. Completing a string of poor reports, Durable Goods Orders (-3.5% vs -2% expected and +4.4% previously) let bulls know there won't be any interest rate hikes any time soon. Further given all these reports, next week's ISM Index should be quite poor.

The only shred of good news was Boeing (BA) stated they'll be on schedule to deliver the often delayed 787 Dreamliner in the 3 rd quarter. This allowed other price heavy weights to charge higher for the price-weighted Dow Jones Industrial Average along with Exxon Mobil (XOM), Caterpillar (CAT) and United Technologies (UTX) and a few others. This pushed XLI (SPDR Industrial Sector ETF) higher.

Bulls quickly sold more defensive sectors (XLP and XLV) as the risk switch was again flipped to "on".

You'd think higher energy prices would discourage consumer (XLY, SPDR Consumer Discretionary ETF) and retail (XRT, SPDR Retail ETF) sectors but no, they rallied higher. But, upon closer inspection investors should view and would be surprised by the top component weightings for each of these indexes. XLY's top weights include: MCD, DIS, AMZN, CMCSA, HD & F.  XRT's top weights include: BKS, GME, ANF & SFLY. None of these are what you might expect.

Once again volume on rally days was ultra-light while breadth per the WSJ was positive reducing some short-term overbought conditions.

You can follow our pithy comments on twitter and join the conversation with me on facebook.


Continue to U.S. Sector, Stocks & Bond ETFs

1 of 5

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs