After just a slight dip on Monday, the buyers jumped back in and drove us straight back up all day today. There was obviously some anxiety about being left out of this market, and the inclination to quickly buy a dip was a good sign for the bulls. As I've been discussing, a trustable bear-market rally requires a good foundation, and the action today added brick to the bullish case.
Retail, oil and technology led the charge, and breadth was better than 2-to-1 positive. However the very light volume was troubling. We want to see the big money driving the market, but for example, many of the oils have been rallying on declining volume, which is a technical negative.
I read quite a few complaints today about the low volume, but obviously it is the price action that matters most. I suspect that many market players have some trust issues with this market and are very slow to commit. That has been the proper approach, but the late-day action today clearly demonstrated some scrambling for long exposure, and clearly some folks started to wonder if all those bottom-callers are finally going to get it right.
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