Stocks posted big gains today with over 2% gains across the board among the major averages. Volume was up compared to yesterday, but still mediocre for such a strong move to the upside. However, we need to classify this as a follow through day, which signals that the market is ready to for at least an intermediate term move to the upside. While it is possible that the recent lows will be tested again, there is now strong support at those lows and it will require a major catalyst to drive the market through those lows.
The top industry groups today were the semiconductors along with manufactured housing, entertainment, oil and gas services and office supplies. All of these groups posted gains of over 4%.
Watch for potential volatility ahead of options expiration on Thursday.
Scott Cole
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