The market struggled out of the gate yesterday and slumped during the first hour. Buying set in, and the bulls slowly but surely regained the upper hand as the major indexes pulled themselves out of the doldrums in part supported by good news on the jobs front (initial claims fell).
Some crosswinds were blowing from across the Atlantic as global and currency issues continued to weigh along with U.S. economic fundamentals. It did not help matters that Irish and Portuguese debt issues remained on the front burner.
Helping yesterday’s market recover was the dollar, which at first rallied and then fell supporting the rebound late in the day. Crude oil was up and gold was down with the big loser of the day being silver, which received a 7% haircut.
The major indexes continue to hover around their highs of the year, which always raises the question as to whether we’re near at a top and subsequent reversal. It could very well be, but so far any pullback has been met with buying keeping the downside risk limited.
This buying support will face some test today, as the futures point to a lower opening of about 0.5% based on disappointing results from Cisco. Cisco got taken out to the barn and spanked last night at a tune of -13.6%. Ouch!