After a big gap down and more fear selling post open, conditions were ripe for a snap-back rally after quickly dropping 200+ Dow points in the first hour. It came in the final 45 minutes of trading, after many shake outs along the way. The morning bounce fizzled at midday on continued European worries and Apple sold off when it didn’t announce the much-anticipated IPhone 5. Just when it looked like we were going to take out the opening lows, Europe bank recapitalization news hit. The volume and magnitude of the bounce may have felt like a low, but I am just not too trusting of more Europe is saved rallies. That said we need to give the bulls some room until Friday’s job report. A small gap down open will likely attract “It’s the Bottom” dip buyers.
Moody’s downgrades Italy’s debt to A2 from Aa2 with a negative outlook after hour. Futures are lower after hours on the news despite Standard & Poor’s downgrade on September 20. So the impact should be minimal tomorrow.
