The computer programs that slammed the market, and the Nasdaq 100 ETF (QQQ) , Monday afternoon, reversed themselves Wednesday and helped to produce a solid close.
The Nasdaq 100 lagged again but the small-caps ETF (IWM) were strong and closed at their highest level in five days. Breadth was very good at around 5,000 gainers to 2,200 decliners but the new 12-month lows are still piling up with more than 600 on the list Tuesday.
There are a number of important earnings reports coming up that will determine the course of this market in the near term. Facebook's (FB) numbers are out and while it beat on EPS, it lagged on revenues and monthly users. The stock traded down initially, but as I discussed in an earlier post the bad news is likely discounted here and I'm looking for weakness to be bought. The stock is now up from the close and gaining some traction. I added to Twitter (TWTR) as a sympathy play.
While I'm not convinced that this correction is over, this is a good start especially with the strength in small-caps. As I keep saying, the key to a market turn will be better stock-picking.
Wednesday evening Apple (AAPL) reports and that will determine if we have a decent low or not. Right now, Facebook is acting like the worst has been priced in and that is what we need. If that can hold it will put a bid under this market.
Have a good evening. I'll see you tomorrow.
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