The S&P 500 came up off its trend line right from the starting bell, and never looked back this morning, finishing strongly with over 9 points of gain (+0.69%). If buyers can dominate the action tomorrow it will seem increasingly likely that this pullback was just that, a healthy pause before continuation of the run. Color us skeptical, however.
Relative strength was also with the small caps and high beta tech issues today which is another possible positive indicator for rally continuation. The RUT outperformed today with a gain of over 1%, at 8.86 points, eating up a good deal of yesterday's fall and bringing it back above the important 50 DMA. However, there is still a lot of work to be done on this index before we get positive on it again.
The one index we were relatively bullish on, the semiconductors, performed admirably today with a gain of +1.55% after its mid-day bounce off the 400 support level. We still think this index could run faster and further than others if the bullish euphoria were to resume.
In summary we think the likelihood that this selling was simply a healthy correction in an ongoing bull market increased significantly today and will be watching very closely for signs of follow through in the morning.
Good Luck!
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Please feel free to poke around in our Market Madness Metals section (and others which, if started at all, are much less complete) and send or leave us your suggestions or comments!
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