Traders have been looking for an excuse to buy today, given how oversold much of the market has become over the last few days. The Biden speech in which he announced the end of U.S. buying of Russian oil and gas was a good 'buy the bad news' excuse. There was also a story on Bloomberg that Ukraine is dropping its request to join NATO. That news was actually out on Monday night, but it appears to be conciliatory, and it was a helpful catalyst when Bloomberg picked it up.
There was some selling of oil into the spike after Biden spoke, and breadth is running slightly positive, but headline risk remains high. Traders have been looking for an opportunity to buy a counter-trend bounce, but they needed something to trigger the setup. Any significant news headline about Ukraine now has the potential to trigger dip-buying if there is a negative response to the news.
In market conditions like this, there is often a very strong desire to try to call the exact market bottom. Everyone likes the idea of being the genius that is fully invested at the exact bottom tick. It is an understandable goal but to do so requires taking on a very high level of risk. The only way you can nail the bottom is to be willing to buy into the teeth of a decline.
My approach is to hold some favored positions but not add to them aggressively until there is better relative strength. I will not be fully long at the bottom, but my goal is to reduce risk and to have the best chance of catching a sustained trend. The bottom-calling game is largely an exercise in ego rather than an effective strategy.
I have not made any significant buys so far today but am looking to make some additions if the strength holds late in the day.