The market is once again playing a dangerous game of reacting based on hope and words made in speeches.  But as a mentor of mine once told me, “Hope is not a plan.”  

Wall Street is rallying on the President saying that he’s confident “America will not default.”  

The House Speaker said Democrats and Republicans could reach a deal by the end of the week.

Neither one said anything definitively.  

I’m sure the President was confident in the debt ceiling debate back in 2011 right before the Tea Party flexed its muscles and the US received its first credit downgrade in history and the market tanked for months.

And saying that a deal could be reached by the end of the week is a throw-away.  Of course, it could.  Anything can happen by the end of the week, but it doesn’t mean it will. 

The Dow Industrials (DIA) bounced off their 50-day moving average and rallied over 1% on the hope.

The S&P 500 also enjoyed the news, but it wasn’t enough to push the index out of the tight trading range.

The Nasdaq 100 (QQQ) didn’t need any more reasons to keep moving higher but enjoyed the positive vibe from the other indices.

This helped maintain the CNN Fear & Greed Index to remain within the Greed zone, the same as it was a week ago.  That’s not necessarily a bad thing, but all of this points to investors believing that the US lawmakers won’t let the government default on its debts.  They better be right.

It’s funny to me that these are the same lawmakers that make it difficult for retail traders to invest in options. Are they really the ones who should be telling us that options are risky investments? Get your own house in order first.

The Volatility Index (VIX) spiked yesterday as investors mulled over the debt ceiling news, but the VIX fell throughout the day as the spin doctors were hard at work. Credit sellers can enjoy elevated premiums while they last. The VIX will most likely drop back down once the debt ceiling issue is resolved.

I have three tickers I like after yesterday’s rally.  Let’s take a look.

The first is Tapestry (TPR).  I drew three, blue, profit target lines on the chart.  I like the pullback and fresh cross over the 50-day moving average, with a close above the previous swing high.  

The next is Synopsys (SNPS).  It had a healthy pullback, into consolidation, and then had three closes above the 50-day moving average.  Yes, it had a doji candle, which can be a sign of indecision.  Wait for a close above yesterday’s high if that makes you more comfortable.

Last up is NetApp (NTAP).  I’d like to see a close above $66, which would fill the gap in mid-April and cross over a previous resistance level.  After $66, I’d like for resistance around $66 and then around $70.  

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