A Deceptively Strong Day

Yesterday we advised that we expected the market to stutter as the major averages traded aggressively over a two day period off their lows and into their downtrend lines. While corrective action from here could certainly still occur one couldn’t have asked for a better day under the circumstances than the markets delivered today.

The NASDAQ and S&P 500 both traded in tight ranges near the rally’s highs on sharply reduced volume. Money managers are clearly loathe to sell even ahead of retail numbers that the market knows are likely less than stellar and employment numbers that have also lagged of late.

Meantime leading stocks continue to outperform a flat market. Have a look at the likes of GOOG, BIDU and AMZN, just to focus on familiar big cap names that have already scored impressive gains off the March bottom. This kind of behavior bodes well for a market that is likely to see new highs itself sooner than later.