Tuesday May 28, 2011- Last week the market gapped down and finished with heavy losses. Today was the exact opposite as the market gapped higher. The bears tried to bring the market down at midday, but after 3 o’clock trading volume and price picked up, all the major indices closing at or near the highs of the day. Volume on the market was above average and adds validity to the price move. The tech heavy NASDAQ and the Russell 2000 indices led the market higher. The advance decline line was sharply higher along with up to down volume. The number of new highs outpaced new lows by a significant margin.
Today’s move came in the face of a host of negative economic reports. Although the European debt crisis news of a potential solution for Greece really helped the futures market, having these gains hold into the close with a negative news backdrop makes the day very important for the prospective character of the market. We temper some enthusiasm because it is the last day of the month and some mark ups are possible. We will be looking for the classic William O’neil follow through day before we get fully invested.