After Friday's massive upswing, fueled by European Central Bank President Mario Draghi's comments last Thursday (latest analysis), the market today took a rest on lower volume.
It is apparent the market is driven by rumors and reverse psychology. Take for example this quarters earnings season. Bespoke today posted a great chart highlighting that the average 1 day return on stocks reporting earnings thus far is 0.7%, the best since Q4 2010.
Why is it that the market is responding positively to overall weak earnings now when last year this quarter the average 1 day return was -2%? As I noted right when earnings season started, everyone knew that earnings would be weak, so expectations were dropped dramatically and sour results were baked in, leaving the market in a position to move higher. That's the way the market goes.
Updated indices below. Stay frosty (sharp) out there and I will see you tomorrow for a special post.