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Tuesday's ISM Short Squeeze, Much Less Squeeze Than Initially Suspected.

|Includes: SPDR Dow Jones Industrial Average ETF (DIA), IWM, QQQ, SPY

ISM MARKET SHORT SQUEEZE

After the recent releases of many of the regional ISM numbers (most of which looked surprisingly weaker than expected, save for the Richmond Report), the national ISM number was released Tuesday at 10AM and was surprisingly good, considering the weaknesses in the bulk of the preceding regional reports.

This surprise in the strength of manufacturing at the national level produced a market short squeeze Tuesday, with many investors who where predominantly short covering their positions, and therefore, temporarily yet dramatically adding significant buying pressure to the markets.

Included in this short-squeeze buying where rises in stocks, the dollar, and commodities. The rotation in this new buying was reported as being generally more indicative of positive reaction to an expectation of a strengthening economy, than to further Fed QE actions.

This could be good news, if these expectations are correct.

Now, to see positively trending employment data emerging and released in reports later this week would be further good news...

Especially or those eagerly looking for a potential breakout in current composite index price resistance levels at this critical juncture, and even a potential reactive market meltup.

However, today's market action failed to follow through, and at one point in the day even erased all of yesterday's gains in the Dow 30 Industrials.

Disclosure: I am short USO.