By Gareth Soloway on May 3rd, 2010 11:46am Eastern Time
The markets are bouncing back today after a $145 billion bailout of Greece and no further negative news on Goldman Sachs Group, Inc. (NYSE:GS). The dollar has surged all morning as most economists and traders expect Greece to just be the tip of the iceberg. Portugal and Spain are next on the list of countries in Europe that may need a bailout. The list can go on and on. Many are comparing Greece to Bear Sterns in the financial meltdown. If that is the case, then who is going to be the Lehman Brothers of the debacle.
Goldman Sachs is bouncing today, solid backing from Warren Buffet over the weekend has helped quiet the fears. Buffet continues to think Goldman Sachs did nothing wrong. Financial companies are strong today as the fear is subsiding. JPMorgan Chase & Co. (NYSE:JPM) is higher by 2% while Wells Fargo & Company (NYSE:WFC) is up 1.5%.
The metal stocks continue to be under an insane amount of pressure. Even with the market higher, United States Steel Corporation (NYSE:X) is down over 3%, AK Steel Holding Corporation (NYSE:AKS) is lower by 2.5% and Southern Copper Corporation (NYSE:SCCO) is down a whopping 4.25%. Part of this is the strength in the U.S. Dollar as the PowerShares DB US Dollar Index Bullish (NYSE:UUP) is up 0.71% but the other worry is that these stocks are telling us the recovery is not all it is cracked up to be. I have written several articles about the metal stocks lately, prior to the markets fall. In them, I discussed how they were falling and it was a leading indicator or the market. The analysis looks to have been dead on. AK Steel has solid support at $16.25 and then $15.00. U.S Steel has good support at $53.00 and $50.50 and Southern Copper has good support at $29.30 and $28.00. Keep an eye on these levels to find a short term bouncing opportunity.
The markets continue to hold slightly to the upside. Volume has returned to the light side which helps keep the markets floating. Watch the financial stocks for a short term market bias and the metal stocks for a longer term bias.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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