Many analysts had expected Monday’s sharp sell off to spill over into Tuesday, but it did not happen. The markets recouped about half of their losses from the previous day, and the major averages closed about 1% higher.
The commonly held view is still one of caution in that many feel that the market has advanced too far and too fast since the March lows to support economic reality. Helping the bulls today were better than expected earnings from Home Depot and Target, decent inflation news and a “less bad” report on housing starts.
Of course, there is always a fly in the ointment, and today was no exception. Volume was low and the rebound faded into the close suggesting hesitation on the part of the bulls.
There are no changes to our invested positions.