[Chart courtesy of MarketWatch.com]

1. Moving the markets

Despite and early sell-off, the major indexes found some footing, wobbled all day yet managed to produce another green close for the second straight day.

It was a tug-of-war between those traders who were scouring the latest corporate earnings for indications that profits remain on an upward trend, which would support higher stock prices in the future.

On the other hand, worries persist that market sentiment may be in limbo, until we get more clarity on a variety of high-profile issues, like the outlook for the economy, future Central Bank interest rate policy and the ever-present political battles with all its uncertainties.

Even ugly housing data and demand destruction in the energy sector, as ZH described it, were not able to put a damper on equities which, with the help of a short squeeze, although with less conviction than yesterday, managed to provide the impetus for keep the rally going.

Bond yields inched up a tad and held the 10-year above its 3% level. Italy was in the limelight with their government collapsing, as their yields spiked to 3-week highs. The US Dollar rebounded a tad, after getting hammered over the past 7 days.

A big sell program in Europe did damage to Gold with the precious metal losing its $1,700 marker.

Uncertainty reigns, with Sam Stovall, chief investment strategist at CFRA Research, singing the same tune as I did yesterday:

History says, but does not guarantee, that yesterday was more likely a bear market bounce than the start of a new bull market.

Only time will tell.

[Chart courtesy of MarketWatch.com]

1. Moving the markets

After experiencing bobbing, weaving and some head fakes, traders finally stepped up to the plate and put some money on the betting table that markets might have finally found a bottom.

Bullish sentiment received some support from strong earnings, which appeared to show that companies are adapting to economic challenges better than feared after the horrific 2^nd quarter.

The charge was led by news out of Europe that the Russian gas flows via the Nord Stream 1 pipeline are seen starting on Thursday, after its scheduled maintenance, but at less than its capacity. That is the exact opposite of yesterday’s news report, which said that no gas flows were planned in the immediate future. We’ll see if today’s news was nothing but a rumor.

Be that as it may, the markets benefited, at least for the day, and the rally continued unrelenting for a change. Even ugly housing data, showing single-family home starts and permits crash, as ZH reported, did not put a dent in today’s market ramp, as another degree of support came from a gigantic short squeeze.  

This Ramp-A-Thon knew no boundaries, as higher bond yields could not slow down the bullish effort either. And the 10-year conquering its 3% level and closing at 3.03% had no negative consequences on equities also.

The US Dollar slumped for the 3^rd day in a row and closed at two-week lows, while gold ended the session slightly higher, and Crude Oil recaptured its $100 level.  

I think we’ll find out within the next couple of weeks, if we have a resumption of the bull market or of this was simply another dead-cat-bounce in an ongoing bear market.

[Chart courtesy of MarketWatch.com]

1. Moving the markets

After Friday’s rebound, the markets followed through to the upside this morning, as positive earnings by banking powerhouse Goldman Sachs supported the bullish mood. But as we’ve seen many times in the past, sentiment lost steam, and south we went.

Contributing to that sudden sour mood was a report from Apple that it plans to slow hiring and spending on growth next year to better deal with a possible economic downturn. That took the starch out of the rally with the Dow not only giving up an almost 400-point gain but sinking into the red.

Bond yields rose, but the 10-year failed to climb back above its 3% level. The US Dollar touched its March 2020 highs but retreated and closed lower. Gold ripped and dipped and ended up a tad in the green.  

Crude oil prices surged back over $100, despite the current administration’s attempt to persuade the Saudis to produce more oil which, based on today’s response, did not work out too well.

Earnings season will now accelerate, and surprises, up and down, are pretty much guaranteed with future market direction being depended on the headline of the day.