Markets Recover on Strong Internals

The markets are sporting a remarkable advance supported by strong internals. A few small sparks on the tinder... Monday's decline looked more like apathy than anything else, featuring muted volume, a stable VIX, and generally balanced Up and Down Volume.

Click to enlarge:

Today, Tuesday, we see strongly advancing Cumulative Tick/ Up Volume and an Advance - Decline Line pegged near 2,800 stocks. With price already up +5.5%-plus, however, traders will be watching the higher-high/low pattern very closely going into the second half of the day.

Commentary from last night's ETF Rewind Pro "Dashboard": (Click to enlarge)

Comments

[Mad Hedge Fund Trader]

It only took a few dew drops of good news for the Dow to recover from its near death experience and rocket 350 points. The “I love America trades” of long bonds and Treasuries came back with a vengeance. The “short America trades” were last seen running down the street with their tails between their legs, with gold breaking key support at $900. News that Citigroup was profitable in 2008, and rumors of the suspension of the uptick rule and mark-to-market accounting were enough to do the trick. It also helped that every technical analyst on the planet was screaming “Buy!”Although this may not last, even a single day of fresh air is welcome.

2009 Mar 10 07:00 PM

[DHS]

This is the beginning of the much belated next leg upward. The bear is entering hibernation ever so slowly, but s/he's going.

2009 Mar 10 07:20 PM

[Dave Wrixon]

Market movements mean nothing. Earnings are everything. Not sure what Citicorp are telling us, but if they really were profitable last year, then what has all the fuss been about?

2009 Mar 10 07:24 PM

[Mark Bern]

I noticed in the Citi announcement that they indicated that the company had notched strong profits on an operating basis, excluding nonrecurring items such as asset write downs. Does this mean that when they report Qtr 1 results in April that net income will be positive or negative. We'll have to wait for the complete story to see how much those nonrecurring items are to know for sure. Isn't it great to see the market respond with a nice rebound, though.

Unfortunately, I suspect (while I am not crazy enough to I'm certain in such uncertain times) that the real numbers will not be so rosy. This is probably a good opportunity to get long at least until early April. But I wouldn't be surprised if this turned out to be just another bear market rally if earnings disappoint again.

2009 Mar 10 09:11 PM

[ArkansasAngie]

I bet Pandit hopes that his comments don't come back to haunt him.

Gee ... I guess this means that CITI won't need any more bailout funds and the v-shaped recovery is here.

Wow! And to think we were worried that:
* unemployment was going to go on up to 9% or 10%
* We're going to have to spend at least $750 billion more
* That GDP for 2nd Q was going to be negative ... again
* Ad nauseum

Well … the sun will come tomorrow -- no doubt.

2009 Mar 10 10:59 PM

[j_remington]

Hindsight is 20/20.

Short covering triggered buying. With bad news the markets would have dropped.

2009 Mar 10 11:39 PM

[Tradememe]

The Citi-based market uptick tells us that it's the financial crisis that is causing the economic crisis and not the other way around. So, we need to find a solution fast for the toxic assets problem that is polluting the financial system. Just stimulating the economy will affect the symptoms and not the root cause of the disease.

2009 Mar 11 12:08 AM

[sr9web]

"Markets Recover" ???

What planet are you on?

Today's bounce is not a "recovery"...

2009 Mar 11 12:13 AM