I'm not sure if it is a good sign but quite a few market pundits were anxious to declare a short-term market bottom today. A big intraday reversal in Apple (AAPL) helped to drive the action and the S&P 500 had its biggest red to green shift on a Monday in over 20 years, according to OddStats on Twitter (TWTR) .
That may not be a meaningful stat but it was a nice intraday turn of some size and that does lend some support to the argument that it was capitulatory action. There are plenty of bears ready to scoff at such naïve optimism. The first thing they will point at is the poor breadth, which was only around 2,550 gainers to 4,700 decliners. There was also over 1,400 names hitting new intraday lows. That doesn't sound like great snapback action under the surface but it is decent start if you want to be hopeful.
The biggest problem recently the bulls have been totally incapable of building on positive action. There has been no sustained upside movement. We had similar reversal action last Thursday and that led to a collapse on Friday
I continue to watch carefully for better stock picking to develop. That is my ultimate test of a market turn. When charts start finding support and there is some tradable follow through then it will be time to put more money to work.
Currently all that longs can hope for is to catch a quick oversold bounce. There is no reason to trust that strength will build. The action today has the potential to be a turning point but it premature to proceed with confidence.
I did a little buying today but this market still has a lot to prove. It needs to hold today's lows for a while to draw in more buyers.
Have a good evening. I'll see you tomorrow.