Courtesy of Blain.
Indexes gapped up sharply at the open, and stayed firmly in the green all day with a round of buying into the close. The S&P 500 gained 1.78% and the NASDAQ 2.12%. In case you haven’t noticed, it’s been pretty volatile out there the past week. But all in all after all the hysteria, U.S. markets finished down about 2% from where they were a week ago – not quite the “zombie underworld” we were warned about if Brexit came to pass.
“I think it was just a market that got a little ahead of itself to the downside,” said Robert Pavlik, chief market strategist at Boston Private Wealth. “A little bit of ‘cooler heads are prevailing’ and seeing this as an opportunity to get in. How long it lasts is going to be the big question,” he said.
“This is going to take a long time to play out and I think the initial shock is being a little reversed right now,” said Doug Cote, chief market strategist at Voya Investment Management. “This is not 2008. It’s more like 2011.” In August 2011, Standard & Poor’s downgraded the U.S. long-term sovereign credit rating to ‘AA+’ from ‘AAA’ as Congress struggled with debt ceiling negotiations.
The S&P 500 sliced through the 100 AND 200 day moving average yesterday; today it cruised right back over the 200 day and sat on the 100 day. The NASDAQ is in worse shape however even with the rally. So caution remains in order until some of this technical damage is soothed.
“The concern would be that this is just a ‘dead cat bounce’ and traders simply see this as another chance to sell. However, for now the outlook is a little more positive,” said Richard Perry, analyst at Hantec Markets.
The NYSE McClellan Oscillator had fallen into our “red zone” yesterday which is a spot indexes usually bounce.
The volatility index is almost all the way back down to where it is during “calm times” – the zombies will be disappointed they are not scaring anyone but CNBC commentators.
While equity markets rallied there was not much relief in the bond market, which is a negative.
Recent IPO Twilio (TWLO) tacked on another 10%… and that is after giving up a lot of gains intraday.
Endo Pharma (ENDP) soared 18% after the U.S. Patent and Trademark Office approved a patent on Vasostrict, its treatment for patients suffering from vasodilatory shock.
Financials took back some of their losses of the past few days.
