After struggling most of the week, we had a real mix of action today. Once again the indices were acting weak after some strength at the open, but for the first time all week the dip-buyers managed to spike us back up in the final hour. We fizzled out a bit in the last few minutes, but the late-day run was something we have been missing lately.
Under the surface there was some surprisingly strong action in individual stocks. Big-cap technology, with the exception of RIMM, did very well, and many of the recent momentum plays came back to life.
The pattern of the market has been to keep on going once we bounced back from the brink of a breakdown. So far the S&P 500 has bounced just about perfectly from technical support, but it hasn't gained much traction. It's been the feeling of a few respected people out there that this time the recovery wouldn't be quick and easy like it was in May, and, in fact, they are looking for the lows of this week to be broken. We'll see.
The scenario that I think bears watching is a break below this week's lows, which shakes out some bulls, and then a bounce into the end of the quarter as money managers press to add some relative performance to their returns.
We had a period prior to the March low where nothing at all worked. Then in the last month or so there was some extremely euphoric action. Going forward I look choppier action and a much greater mix. We will have some good long opportunities, but there are going to be more shorts also.