It was a good day for all the exchanges we often talk about. The NASDAQ and S&P 500 both posted gains of 1.16%. Meanwhile, the Small Cap Russell 2000 posted a small increase of .30%.
The gains from perspective were not impressive. Volume was absent! So don’t be in a rush to come off the sidelines and buy. This is a short covering rally before the CPI report comes out Wednesday. Seeing a continued march higher for most of the week would not surprise me. The short players are covering, and it’s unlikely they will take new short positions before the CPI (too risky). What is important is that the sellers have not yet returned. I would guess they are waiting for a little more market recovery before they begin selling again.
Note the chart below of the S&P 500.
The last trade of the day was a market at close buy of approximately 79 million shares. The average daily volume of the S&P 500 is approximately 2.5 billion. It is not unusual to see 10-15% of the day’s total volume trade the last trade of the day.
So 79 million is a small market at close trade, which also indicates to me that real buying is still sidelined.
Another interesting fact is the Small Cap Russell gain was very small on the day. That also indicates to me that the buyers are sidelined because I expect this index to outpace both the S&P 500 and NASDAQ in the last few months of the year. The buyers are just waiting for a better time to step in so be patient.
Upstart
Upstart had a nice gain today, up .79 by day’s end, and again, it’s nothing to be excited about as it was also short covering. Volume was subdued at best. This will continue (volatility) as the market goes through the current correction. And Upstart I believe will correct further (downside) when the market resumes its current correction. Upstart best days are ahead (the last few months of the year). The next 1-2 most likely will be volatile.
I have several stocks on my buy list that I will post sometime in that period.