Markets began the week bringing back the “Mutual Fund Mondays” moniker with a nice gains. Seems like everyone is leaning on the bearish side of the boat and perhaps todays action suggests some of those bears covering although volume figures would indicate their appetite was light. The price action however was unmistakeable. The S&P 500 rose 1.3% and the Nasdaq kicked in a 1.2% advance. Lets remember to keep an eye on the Nasdaq to see if it can regain its footing as the undisputed leader as it underperforming the S&P 500 has become common ground recently. What is not uncommon for Mondays is for M&A activity to be announced. This time it came from Warren Buffett as he looks to acquire PCP. Before today the stock was deep into bear market mode and the Oracle must have seen some value. The lagging energy sector was the best performer today and one would normally like to witness top groups participating most in moves like this. Could there be some rotation into the group? It is way to early to tell but volume trends on the XLE have been a bit more bullish although follow through has been tough to come by. The ETF had a 4% plus move 7/28-29 on very nice volume but then almost immediately resumed its downtrend. Last Thursday saw a 1.6% gain in almost double average daily volume only to give back all those gains and the some on Friday. Could it be some of the money made in the biotech space since last spring making its way into the energy group?
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