Market Recoups Most Of Its Losses

The market rallied strongly late in the day to erase most of its losses. The SPX erased most of a 9 point loss to close down less than 3 points (1318). The Nasdaq fell 36 points intraday, but closed with a loss of 13 points (2222).

So what looked like it could be a big selloff today turned out to be a very mild pullback. This is the kind of day that is very frustrating for the bears, as any downside bets that were put on today are already underwater.

As the charts above show, both oil and bond yields moved significantly lower today. This should bolster sentiment on inflation, and could make its way into the Fed comments tomorrow.

I mentioned earlier how high the put/call ratios were today. So there is a lot of people betting on more weakness, and this could add additional upside pressure for the market at some point if these bets continue to be underwater.

The brokerage and retail sectors finished higher today, which is a good sign. Semis and energy stocks were the weakest groups.
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