The markets still had a hangover yesterday from Monday’s disappointing results by IBM and TI. Nevertheless, a rebound materialized reminding me of the old adage “one man’s trash is another man’s treasure,” as buyers saw opportunities where others saw disaster.
Domestically, the only negative news came from the housing sector with housing starts falling again while building permits were up.
This rebound may be supported further today as Apple surpassed analysts’ estimates after the close yesterday. The number to watch in terms of new upward momentum being generated is the 200-day moving average of the S&P; 500, which currently is around the 1,111 level.
Until that is broken, we remain in neutral territory, moving in a large sideways pattern, and aware of the possibility that a break-out to either side can occur at anytime.