today

About Shark Watch


Tuesday, July 22 - 5:21 PM

Afternoon Comments

As we worked our way through the afternoon, it was looking like the market was going to finish out the day with modest gains, and given the gap lower at the open and the fact that investors were able to shrug off a slew of poor earnings reports, that would have been pretty darn good. However, a wave of buying which came at a torrid pace in the final 30 minutes of the day allowed the indices to close with average gains of 1.2% on decent volume and breadth that was about 2:1 to the positive. While the drop-off in oil put pressure on energy and materials, it was that move which led to the initial recovery off lows as the hope begins to grow that the commodity may be seeing a sustainable move off recent highs.

Although much of the late move was aided by buying in consumer discretionary, industrials, and staples, the big winner on the day was again financials. Of course, if you wanted to keep pace with the market today, you would have had to been positioned perfectly and wiling to buy areas of the market that had already bounced strongly and were facing some pretty bad news. At the same time, if you stuck with the sectors which had led for most of the year, you would have lagged badly. There are obviously trades to be had right now, but finding them has required shifting focus on a daily basis and very short time-frames.

From a technical perspective, the averages have moved right into overhead resistance, and as such, the ball is fully in the bulls’ court. Can they deliver a meaningful push higher, or has this market come too far, too fast? We’ll have to see, and with more earnings reports set to hit, we might not have to wait too long to find out.

Have a great evening, and we will see you tomorrow.