Starting to see some more green on the charts these past few days. The ‘risk on’ sectors (i.e. financials and tech) as well as emerging markets did well yesterday. Momentum has picked up and buying volume has gained some steam. I referenced on Monday the positive divergence in the S&P 500, which appears to be working out towards the upside for the index. We’ve seen depressed sentiment data as well as pundits freaking out on various financial news shows, both are things that can indicate the teeter-totter might be a little lopsided.
It’s important to recognize, as Barry Ritholtz noted this morning, that this so far two-day rally has not been on the back of fundamentals but due a possible bailout for Spain and other bailout rumors. The market waits with bated breath today to see if Bernanke gives any clues to possible further easing when he testifies before the congress at 10am. If Wall Street doesn’t get what it wants from Bernanke then it’ll likely be hard pressed to keep putting juice into this market.
Technically things look solid from there, it appears there has been a slight shift into higher beta names, commodities like gold and oil have picked up some bids, and everyone knows Wall Street loves a good bailout.
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