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The market held up remarkably well following yesterday’s huge rally. Unlike several previous instances that saw those 2%+ rallies, the market didn’t roll over immediately. In fact, it was even more impressive considering some negative earnings results in the financial sector. Both the Dow and the S&P 500 were up modestly while the Nasdaq led the market with a gain of 1.2%. There is little economic news scheduled to be released. However, continuous weakness in crude oil provided much needed support to today’s trading.
Basic materials and energies were among the best performers for the session. After being beaten down relentlessly for the past month or so, it is not surprising at all to see some “dead-cat” rebound in those two sectors. Any rallies should be used as an opportunity to unload rather than accumulate. On the losers’ side, we had names like financials and transportations. However, the losses were quite limited. The CRB commodity index closed the session modestly lower. The US dollar continued to strengthen against most major currencies, especially those commodity-rich countries. It is worth noting that the dollar is strengthening rather remarkably despite somewhat dovish stance from the Fed statement yesterday. That was indeed quite impressive. Treasuries continued to move lower. The VIX index tumbled another 4% and was barely above 20 at close. The market breath was slightly positive on NSYE and positive on Nasdaq with relatively moderate volume.
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