The market's ability to forget the worries of the prior day has been a common theme in recent years. Maybe that is due to the prevalence of computer algorithms, but on Monday there was grave concern about the impact of the coronavirus that was spreading in China, and Tuesday it was treated as just some trivial action that will have little meaning.
There were soothing comments from various officials and no news about exponential growth in new cases outside of China, but there will be some significant economic fallout nonetheless.
A relief rally following a day like Monday isn't a big surprise, but the steadiness of the buying was. That may be due in part to optimism about earnings from Apple (AAPL) tonight and hope of a friendly Fed Wednesday. In addition, many market players and algorithm programmers are keenly aware of the market's inclination toward V-shaped bounces. The dynamics of the market tend to favor self-fulfilling prophecies to some extent.
The reaction to Apple's report after the bell should be very instructive as to overall market sentiment. Apple has become almost a safe haven for capital as it has been on such a relentless uptrend for so long. There is no real worry there and even if the company does't have a blowout quarter, it still will be buying back billions of dollars of stock.
The complacency now is a worry, but until the price action shifts it is of little concern.
Have a great evening. I'll see you tomorrow.