After yesterdays sell off the market bounced back today. It took a little bit of time but the market managed to post advances once we were 90 minutes into the day. Volume and volatility was subdued which was good to see after yesterday's rather explosive move. At the end of the session the Dow was up 124.25 points or + 1.51 %.
Geithner testified in front of the House Oversight Committee and he actually did a pretty good job. This is at least how the market perceived it because the market managed to turn green while he was speaking and built on those gains after he left to talk to his "boss". (that is how one member of the committee phrased it)
The perhaps most interesting tidbit was that corporate results announced early today and late yesterday afternoon were mixed but came mostly in below expectations. Despite what should have been a disappointment for the market we managed a positive close.
Furthermore, the complete lack of additional selling pressure gives me some hope that even if we head lower from here it will be in a more orderly mode than what we have seen earlier in the year.
I am still neutral on stocks and expect the Dow to trade down to the 7500 level. As such I view today's up day as a correction to yesterday's steep sell off.
Be it as it may...today's up day at least made clear that the days of mind blowing swings with tremendous volatility seem to be over for the time being. We might see big days but if today is any indication we will also now get the calm after the storm...and this is perhaps the best news the stock market could have possibly delivered today.
Let's hope that we will have another orderly day tomorrow.
Till then,
Steve Benger
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