We started off slowly this morning but gained steam before a weak finish. Strength in financials was the main driving force, but weakness in dollar helped quite a bit as well, and oil and commodity plays bounced back after some rough action last week.
The bounce in big-cap momentum names such as AMZN, CMG, GOOG, AAPL, LULU and NFLX is what really helped to make some folks feel better, but it really had the feel of a combination of a short squeeze and end-of-the-quarter window-dressing. Most of these names are still facing substantial technical hurdles, but these are the names that money managers need to see recover if they are going to post decent returns.
Quite a few traders were moaning and groaning about poor charts and the low-volume nature of many of the bounces. That is just the nature of the action that occurs within the context of a downtrend. Market players are not acting as though they believe that we are on the cusp of a major market turn.
The bulls have a number of positives going for them in the near term. We have the end of the quarter, positive seasonality, oversold technical conditions, some nearby support, the potential for positive news out of Europe and a fairly high level of negativity. That may be all we need to give us some additional upside follow-through.
