Steady selling pressure on the market persists, but weak economic reports may actually be a positive as they generate speculation that another round of quantitative easing may be forthcoming. Weekly unemployment claims, Philly Fed and leading indicators all came in below expectations, but the U.S. dollar is dropping and gold is ramping on hopes that the Fed will crank up its printing press sooner rather than later.
The market is quite oversold, and buyers are likely to latch on to any good excuse to believe in a bounce. Nothing would excite investors more than QE3.
The dip this morning is starting to have the look and feel of capitulation, at least in the short term, and I'm looking hard for some long exposure. I have some Direxion Daily Small Cap Bull 3X Shares (TNA) and looking to add a few things for a trade.
I am definitely not going to proclaim a market bottom, but it's looking better for bounce action now that we are seeing some buying on what is very poor news flow.