Today the major stock market indexes have caught a light volume bid higher off the lows of the day. Many stocks have been crushed since the August 10th high in the major stock indexes. The S&P 500 Index at that time was trading as high as 1129.00 and today made a low around 1039.00. In just two weeks the S&P 500 Index has declined nearly 8.0 percent from the recent peak to trough. As you may expect the markets are short term oversold at this time. Therefore, a short term bounce cannot be ruled out.
The talking heads in the media are now getting very bearish. When this happens the markets have a tendency to bounce higher in the short term. The key for the market indexes is to see where they close. Right now the major indexes have been sold almost everyday before the close. Therefore, until that changes the late day selling can continue. Today, many leading stocks such as Google Inc (NASDAQ:GOOG), and Amazon Inc (NASDAQ:AMZN) are trading higher. These are leading stocks and often help carry the markets higher. However, today the markets have fought back to get to the positive side. The big test is whether or not they can stay positive in to the closing bell.
As you may or may not know Exxon Mobil Corp (NYSE:XOM) is my personal stock market barometer. When this stock closes higher on the session the market is usually positive to flat. When Exxon Mobil closes lower the stock market is usually lower on the session. In any case, we shall see if the major stock indexes can finish the day in the green from a short term oversold condition.
Nicholas Santiago
Chief Market Strategist
www.InTheMoneyStocks.com
