We started the day with an ugly gap down as higher-than-expected weekly unemployment claims, more problems in Greece and a stronger dollar spooked the market. For four hours after the opening, we drifted around as the dip-buyers showed little interest and the bears failed to press their advantage. Finally, at around 1:30 p.m. EST, the machines went to work, and we had a quick pop. We drifted again for another hour but then popped again and ended up closing near the highs of the day. Weakness in the dollar helped the cause, and of course the day before the last day of the month is always prime time for some end-of-the-month markups.
Under the surface, it was an odd mix of action. Gold and retail led, while regional banks, oil and biotech lagged. We started off the day with very poor breadth, but it improved nicely and was only around 2,400 gainers to 3,200 decliners by the close. We certainly came back very nicely after the poor action this morning, but I'm not at all convinced that further upside will come easily. We still have some substantial overhead resistance, little leadership and a lack of energy. We did have higher volume today, but the major indices were still in the red at the end of the day, so it is technically a "distribution day." It is a muddled picture, although the late-day recovery is definitely bullish. Stay nimble while we wait for a clearer trend to develop.....
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