I think I heard the market say “No Mas” today. Apparently, it has had enough of going down, at least for now (for that matter, I’ve had enough of it too!). With a big bounce off the new yearly lows of yesterday, the Dow Industrials rebounded for a gain of 206 points (+2.1%) to 10219, the S&P 500 gained 22 points (+2.0%) to 1160 and the Nasdaq had a huge day, grabbing back 49 points (+2.5%) to 1962. The Russell 2000 added 14 points (+2.0%) to 599, the Dow Transports zoomed up by 3.5%, the Dow Utilities gained 1.3%, and bonds fell off, pushing the 10-year Treasury yield up to 4.30%.
Market internals were very positive, with volume increasing slightly from yesterday on the NYSE, but interestingly enough, volume actually pulled back a bit on the Nasdaq. Advances solidly led declines, at 8 to 3 on the NYSE and 11 to 4 on the Nasdaq. Up/down volume was very positive, at 17 to 3 on the NYSE and more than 5 to 1 on the Nasdaq. New highs/lows still suffering at these low levels, registering 23/66 on the NYSE and 28/105 on the Nasdaq.
Green pretty much across the board today, the lone exception being the gold & silver stocks, which gave up 1.1% today. On the up side, the biggest winners were airlines (+3.7%, crude oil moved higher, go figure), internets (+3.4%), computer technology (+3.4%), steel stocks (+3.2%), oil services (+3.1%), semiconductors (+2.8%), transportation (+2.7%), computer hardware (+2.6%), disk drives (+2.6%), natural gas (+2.5%), chemicals (+2.4%), oil (+2.3%), defense stocks (+2.3%) and networking (+2.1%).
Crude oil prices moved above $54 to $54.20/barrel. The dollar index moved higher by 0.2%, and gold prices fell to around $432/ounce.
So what does today mean? Not a lot, in and of itself. It could change the character of the market in the near-term, as the market may be digging its heels in here and refusing to go lower. But we’ll need some follow-through in the next few days to get confirmation of that. I found it somewhat interesting that many of the tech stocks that went blasting out of the gate yesterday morning did not manage today to even take out their highs of yesterday.
In the longer term, it doesn’t mean very much at all. Two of the three major indices just came off new yearly lows set yesterday, although those new lows were not confirmed by the Nasdaq. The major indices still remain quite extended to the downside, buried below their 50-day moving averages (today’s action allowed the S&P 500 to poke up above its 200-day MA). So there’s plenty of work to do to get moving again. Make the market prove itself worthy of your money.
Pay no attention to the headlines trumpeting that this is the best day the market has had in X number of months. And try to stay clear of CNBC’s slobbering all over Google’s earnings report after the bell, ok?