Early morning trading saw a selling frenzy as soon as the market opened. Disappointing economic news from retail sales did not help things. Just as fast as the market dropped buyers swooped in and pushed the market to the highs of the session. Once again the market rolled back over and hit new lows. At one point it appeared as if the Dow was about to crater more than 500 points. However, it was not in the cards as the market turned and ripped higher led by the Russell 2000. Just before the close the NASDAQ was able to turn positive, but could not hold. Today’s action was quite bullish with the Russell 2000 signalling Day 1 of an attempted rally. Remember, today was just one day and we will need to see this market confirm this rally attempt.
Whether or not this turns into a rally lasting into year-end is anyone’s guess. Today we saw the VIX hop above a 30 handle and soar through the roof! If today were a bottom it certainly would qualify from just these two stats alone. Even more impressive is the Russell 2000 is leading the charge. While many will rush into this market to catch a bottom we will be waiting patiently to strike. You do not need to get on the very first day of a rally to grab monster stocks. Stay patient despite today having a very bullish tint.
Just after the close there was some interesting action during the after-hours session. NFLX dived after reporting earnings. The stock was down more than 100 points in the after-hour session. EBAY disappointed as well, but did not suffer the losses seen by NFLX. As soon as earnings hit the wires QQQ and SPY pushed lower from their closes. It will be interesting to see how this market reacts tomorrow.
One thing pushing the market was the release of the Federal Reserve’s Beige book. We saw when their meeting minutes released the market reacted positively and today was no different. There was even a Yellen rumor at the end of the day. The wild card now is whether or not the Federal Reserve will change its stance at the end of the month.
Today was one day and while it was a positive day we are not going to get overly excited over just one day. This market is oversold on just about every time frame. A rally here whether sustainable or not would not be surprising. Stay patient.
