A Relief Bounce; But Not A Good One

At long last, the market finally managed an oversold bounce. The major indices broke their losing streaks, breadth was positive, and there was some green on the screens. Unfortunately, we closed weak and there wasn't enough vigor to the action to cause the bears much concern. It just looked like a minor relief bounce after a real pounding.

The action today was pretty lackluster overall, and you have to be quite optimistic to expect this to develop into another one of those V-shaped moves that we saw so often before the first of May.

The only surprise is that we didn't see this sort of bounce earlier. It is exactly the sort of countertrend move you'd expect to see within a downtrend. In fact, oversold bounces are often more lively, because no one is well positioned for them.

We'll see if the bulls can manage some follow-through tomorrow. It is going to be a hot summer Friday, so the action is likely to be slow, but that may allow the bulls to push us a bit more.