The market enjoyed a nice little bounce today. It wasn't huge, but it was a solid reversal from the early selling pressure. Moreover, volume was pretty solid on the NYSE
. And as I have said, I think the market can build on this rally over the course of the week.
It was also nice to see the financials participate. The semis led the way (+1.7%), which is a good barometer for growth stocks. But the bank index gained +1.6%, and the brokers bounced +1.3%. Actually, it was the upgrade of Morgan Stanley's (MS) credit rating midday that really lit a fire under this rally.
My game plan is to stay long for this bounce, and lighten up a little if and when the markets run into resistance. The fact of the matter is that the technical damage that we have seen in the charts doesn't mend itself overnight.
Market bottoms are a process. We have seen the first leg of the decline. Now, the normal pattern is for the market to bounce, and then come back down for some sort of retest of the recent lows. That action will need to be closely monitored to do more buying for what will hopefully be another strong second half rally.