Most expected a bounce today and we got one. The surprise in matter was the strength of the bounce. However, I wouldn’t make the assumption that a bottom has formed, because the volume doesn’t support it. Today’s rally didn’t convince me that a lot of capital was pouring into the markets trying to bargain hunt. Yes, the volume was significant, but it was also significantly lower than yesterday’s volume across the board.
Had this been bargain hunting or investors convinced that the worst is behind us, I think we would have seen a pretty significant volume spike. I could be wrong, but I believe that today’s rally was nothing more than a bounce. We have the bailout to be still agreed upon, and whether that happens this week, next week or never, the market saw much of its positives being priced into today’s rally.
In essence, I don’t believe that Mr. Market likes to provide relief to our pain and suffering as quick as it did today. Typically the market likes to kick you while your down and then rub your face in the mud. We didn’t quite get that today, but we probably will in the days ahead.
Here’s the Nasdaq and S&P charts…