The bounce continues and the S&P 500 is trading at its highest level of the day. It is a huge bounce but it only takes things back to where they were 24 hours ago. The bulls are hopeful that the washout yesterday is going to produce a lasting low but it is earnings tonight that will tell the tale in the short term.
Amazon (AMZN) , Alphabet (GOOGL) and Intel (INTC) are the big guns that report tonight. The question we have to ponder is whether market players will be looking for reasons to buy or to sell. The actual numbers they report aren't nearly as important as expectations and mood.
In a poor market a minor beat will often produce a 'sell' response. Market players will find an excuse to not chase. A really big blowout will offset the 'sell the news' inclination but often when that happens there is a 'gap and sit' reaction without much additional upside. We are seeing an example of that today from Tesla (TSLA) which blew the doors off with its report but it hit its high at the open and has been trading flattish the rest of the day.
If the buyers have a positive response to the reports tonight it is going to help produce a 'fear of missing out' response and help drag the broader market higher. There will still be some significant technical overhead to deal with but FOMO is very powerful once it occurs.
The big bounce in Amazon intraday is going to make it tougher for it to keep running on earnings but it has always been a stock that is unkind to shorts. I expect them to beat and for there to be a positive response but I would not be surprised to see a reversal to the downside once the euphoria wears off.