I hesitate to suggest we have finally seen a bottom to the market ugliness this year, but many signs suggest just that. SPX gained $38 to close at $1907 and RUT gained $23 to close at $1021. That was a 2.3% gain for RUT as compared to 2.0% for SPX; that may seem insignificant, but RUT has rarely outperformed SPX, not only this year, but throughout most of 2015. SPX gapped open higher at the open and remained pretty steady throughout the day. Trading volume dropped off with 3.2 billion shares of the S&P 500 stocks trading. Trading volume was down 4% on the NYSE and down 14% on NASDAQ.
The large lower shadows on the SPX and RUT candlesticks Wednesday was a strong signal, but yesterday brought a weak follow through. Today's close on SPX is well above the August flash crash lows, but much more damage was done to RUT. The small cal index remains below even the October 2014 correction low.
The elephant in the room is the price of oil. Oil traded up today and I think that was the principal confidence builder for the bulls. I believe that relationship is over done, but ignore it at your peril. Others pointed to the report of existing home sales for December, coming in at 5.76 million, a large increase over November's 4.76 million.
The big question is whether this market continues higher next week. We have a Fed meeting next week - good or bad? This market is impossible to predict with any certainty. But many are trying...