Another late-day spike took some of the sting out of an ugly day but we still suffered a good bout of profit-taking. While volume was a bit light, breadth was very poor and regional banks were particularly poor.
In the bigger scheme of things, the pullback today is very healthy but bear-market pullbacks have a way of turning into reversals. It is probably a good sign that buyers are willing to step up in the final hour, but I suspect those are mostly short-term traders playing a reoccurring theme rather than big institutions building positions. Nonetheless, there are obviously some folks out there who are willing to jump in on dips.
So is our pullback over and is it now time to jump in? A two-day correction isn't all that much and although we did close just slightly under the 790 on the S&P 500, we aren't at any major technical support, for those that believe.
We also have to wonder how the end-of-quarter games might manifest themselves. Will they try to hold us up tomorrow just to unwind them again later? There is a lot of focus on quarterly performance right now, so we should be pushed around a bit tomorrow.
Overall the market action holds some promise, but it is up to the bulls to not let things fade too much. Confidence is still fragile and too deep of a pullback will erode it I'm afraid.