Happy first market day of 2013. As it has been for the previous four years (with 1%+ gains in each) 2013 began with a bang with a 2.54% gain in the S&P 500 and 3.07% gain in the NASDAQ. This year's reason was the agreement by Congress yesterday to do a minor compromise to push out most issues two months - for a market that focuses on the day to day, sixty days is an eternity, so this was viewed as very positive news. There was a positive ISM Manufacturing report which showed an expansion again after two months of contraction but frankly economic news meant little today as the market gapped up at the open, came in a little, went sideways for hours, and rallied hard into the close. Everything other than the fiscal cliff situation was details.
After looking extremely vulnerable just two sessions ago the big two day move has created quite a change in the technical picture. Last week we were discussing how the S&P 500 fell out its ascending channel that it had traveled since mid November. But just like that, it not only is back within the channel but at the top end of it.
The NASDAQ, after flopping around its 200 day moving average for weeks, of course followed suit and is back to mid October highs.
One index I'd like to point out is the Russell 2000 which has been a leader of late - it focuses more on smaller capitalization stocks. You can see a broad CANSLIM type "cup and handle" formation which broke out to the upside the past two sessions.
This same pattern is also seen in the leading sector ETF - the financials - which have been the leaders of this recent leg up.
As for individual stocks it really was one of those days you could throw a dart and find a winner, so there is not much we can decipher in terms of individual strength.
Looking at the NYSE Oscillator it is something we've become used to in the news driven markets of 2008-2012 (now '13). Vicious moves in both directions which can turn overbought to oversold in a few sessions - or vice versa.
Remember Friday we have the monthly government data on employment.