The gap-down start to the day put a damper on the holiday mood, but the dip buyers did do a nice job of bouncing us for a few hours. That said, they were unable to hold on to gains and ended up taking a roundtrip intraday. Breadth wasn't terrible, but no major sector managed a positive day. It appears that market players simply weren't willing to hold onto positions over the weekend when there is a chance of more poor news out of Europe.
Overall, trying to draw conclusions from the action today is like trying to find meaning in the Black Friday shopping activity. The conditions that exist are unique to the Friday after Thanksgiving and not very predictive of what will happen next week.
Technically, the S&P 500 has carved out a very obvious trading range between 1173 and 1200. Some better-than-expected economic data has helped to support the market, while the ongoing sovereign debt issue in Europe is a source of pressure. As a result, we have been ping ponging up and down more than usual.
Volume will pick up next week and we'll have a much better sense of sentiment and which way this market may break. The bulls need to push us back up over 1200 to trigger a resumption of momentum, but the news flow lately is providing some big obstacles. I suspect that Europe will continue to struggle with uncertainty, and that will keep the dollar strong and prove to be a major headwind.
The biggest positive we have is that there are some stocks out there with very good earnings numbers that seem unperturbed by the macroeconomic conditions. The dip buyers are staying focused on them, and that is keeping the downside contained, so far.