It has often been said that the stock market will do what it can to frustrate the most people possible. There are plenty of exceptions to that aphorism but the action today is a good example of catching folks by surprise.
After the very poor action last week, many, if not most, market participants were anticipating a very weak market into the uncertainty of the election. Technical conditions are poor with some key resistance falling and momentum working in reverse. Fundamentals have been ignored and the selling has been correlated.
That sounds like a recipe for more downside but so far the gap-up open is holding. The S&P 500 is hitting intraday highs and breadth is robust with around 5700 gainers to 1500 decliners.
This is a classic bear trap and it forcing some folks to do some chasing to try to add long exposure, but we still have to wonder if it can continue into the election.
One theory is that the market is anticipating that there will be a clear resolution to the election quite quickly but I'm not sure I trust that spin. No election this contentious is going to end without some sort of drama.
I'm not doing anything major right now but I'm more inclined to buy favorites on weakness than I am to sell into strength.