After the sudden drop in AAPL and an intraday reversal of the indices yesterday, many market players quickly became bearish. After all, the market has been extended and hasn't corrected for quite some time, so didn't it make sense to anticipate more profit-taking in the near term?
What the bears failed to appreciate was that the dip-buyers weren't ready to go away. They have had great success for a very long time, so when we had slightly decent economic numbers and then news that Greece was going to be saved (yet again), they piled in and just kept pushing. The bears, who felt so confident last night, were forced to reverse course suddenly and yet another straight-up move was under way.
It is almost comical that the market keeps responding to news about Greece when everyone knows it's just a matter of time before it defaults. Greece is just a convenient excuse for dip-buyers to do what they are already inclined to do. When the market really does have a change in character, the news will be viewed in a much different way.
So here we are, right back where we were a couple of days ago. We had a brief hiccup that helped to create a little negativity and, in the ironic way the market works, that helped to propel the move to the upside today.
It was a solid day for the bulls, with decent volume and close to-3-to-1 positive breadth. It is amazing how fast we can regain upside momentum.