The good news is that stocks bounced sharply and recouped a substantial percentage of Wednesday's losses.
The bad news is that there is still no solid indication that the recent corrective action and poor reaction to earnings from both Amazon (AMZN) and Alphabet (GOOGL) are causing a reversal of much of the gains the Nasdaq 100 (QQQ) has given back around half of its gains after the close in response to those reports.
Earnings season has been tough so far and without a positive reaction to these major reports it is going to be very tough for the market to build on Thursday's bounce. We will have to watch closely now to see if support can kick in. We can't afford to retest the lows that were hit at the close Wednesday night.
Even if Amazon and Alphabet put a damper on this bounce action, the market may start to focus more on separating the winners from the losers. Microsoft (MSFT) and Twitter (TWTR) were winners and there are many other stocks that have been unfairly punished by this market but when the macro swings are occurring it doesn't much matter.
The important issue to keep in mind is that big swings tend to occur in the worst markets. Moves like we have had in the last couple weeks are not indicative of a bottom. This show us that the corrective process is ongoing but we will have to wait until there is more technical improvement.
What I'm looking for is a market environment when stock-picking will matter more. While we aren't there yet, the different reactions to Microsoft and Amazon shows that there is a shift taking place.
There are many opportunities developing so stay optimistic and be patient.
Have a good evening. I'll see you tomorrow.