We finally managed a strong close, but it was a mixed day of action, with the Dow Jones Industrial Average and S&P 500 leading, while the Nasdaq and small caps struggled. Big-cap momentum favorites perked up, but reversals in oil and semiconductors were the main drivers into the close.
The market has been pushed down hard enough recently that it was due to bounce, but it hasn't been easy. The action looked quite lackluster until the last 90 minutes. Even then, breadth on the Nasdaq was still solidly negative, with around 1,050 gainers to 1,575 decliners.
At this point, we have nothing more than a minor oversold bounce. It does nothing to change the bigger technical picture, which remains negative, although still a bit extended to the downside. We can certainly bounce further. It's a good sign that we held above the low in May, but there isn't any good technical reason to believe we have found a lasting low.
We can expect to play more oversold bounces here, but we need to continue to respect the bears, and the fact that a downtrend is firmly in place. Still, today was a nice change of pace after the beating we've suffered.
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