Solid Reversal Day
Yesterday I commented that the outside day reversal was possibly foreshadowing further weakness. But, as always, follow through is the key. Today, we basically got a reversal of a reversal, with the SPX closing above Tuesday's opening levels and the COMP making new 52-week highs.
Volume rose nicely today, so there was some conviction behind the move (and it makes for an accumulation day). Breadth was also solid, with a strong A/D line and the Hi/Lo Index bouncing back sharply. I was also surprised to see the market essentially shrug off both higher oil as well as higher bond yields. Maybe the market is coming to terms with the durability of this expansion.
The Nazz outperformed handily today, which is nice to see. Recent laggards like Apple (Nasdaq:AAPL) and Google (Nasdaq:GOOG) both rose sharply today. There have been a lot of rotations from energy stocks to commodity plays to industrials to brokers. Maybe it is tech's time in the sun?
long AAPL, GOOG