Ags, Banks, Chinese Internets Lead Technical Bounce in Markets

Agriculture stocks got a push morning with CF Industries Holdings (NYSE:CF) up 3.4%, Potash Corp. (NYSE:POT) up 2.8% and Mosaic Co. (NYSE:MOS) up 2.44%, following the strength in grain stocks as they respond to potential supply pressures. Essentially, wet weather will delay plating in the US Midwest, while dry weather in the southern plains and Europe hurt winter wheat prospects abroad.

Markets around the world were down to start the morning on news Greece is requesting further aid to deal with debt woes, further sinking the Greek ASE Index to 13-year lows on the news. Adding uncertainty to the Greek debt situation was the IMF’s Chief Strauss-Kahn, as he was arrested in NYC, accused of sexual assault by a hotel maid in a luxury mid-town suite.

However, the currencyshares Euro trust (NYSE:FXE) and US markets have bounced back, driven by buyers looking for support near at 1330 level on the S&P 500 index. Scott Redler, chief strategic officer of T3Live.com, believes for the markets to get out of trouble, the S&P needs to get above 1342-1345 and hold. He thinks that area represents the first ideal level for shorts to get back involved, but to watch for weakness in the leaders first before blindly throwing out shorts.

Speaking of those leaders, many of the industry groups that led markets down the last few weeks were the first to show relative strength shortly after the open. Traders found leadership in the metals and mining sector as Cliffs Natural Resources (NYSE:CLF), Consol Energy (NYSE:CNX) and Silver Wheaton Corp. (SLW) are up over 2.5% with CLF up almost 5%.

Crude oil and silver futures bounced with the markets, but the iShares silver trust (NYSE:SLV) still remain negative on the day, down 1.5%.

Petroleo Brasileiro SA (NYSE:PBR), Transocean LTD (NYSE:RIG) and Whiting Petroleum Corp. (NYSE:WLL) pace oil stocks up over 2.5%, outperforming both crude oil and oil service HOLDRs (NYSE:OIH) with most of the group positive on the day, after selling off in overseas markets prior to the US open.

Investors got a technical bounce from Chinese internet stocks Sina Corp. (SINA) up 5.20%, Sohu.com (SOHU) up 2.6% and Qihoo 360 Technology Co. (QHOO) up almost 1%. Baidu.com responded to early strength in the Chinese internets, trading higher by nearly 3%, but is bumping up against its 50-day moving average.

Banks also found a little support after heavy selling last week, but the absence of new positive fundamental news in group suggest it is also a technical bounce. Goldman Sachs (NYSE:GS) declined from $152 down to $139, so bounce to $144 area makes sense. Wells Fargo (WFC) leads the group up over 1%, while Citigroup brings up the rear, flat on the day.

Traders will be keying on the large cap technology stocks this afternoon with Amazon.com (NASDAQ:AMZN) down 2.2%, Apple Inc. (NASDAQ:AAPL) down 0.71%, Google Inc. (NASDAQ:GOOG) down 1.1% and Netflix Inc. (NASDAQ:NFLX) down 1.31%, failing to bounce with markets, thus demonstrating relative weakness.

Disclosure: None

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