Stocks rebounded a bit Wednesday after a very sharp pullback Tuesday but it was not a very convincing rally. Most of the action was in the "four horsemen" where it appears many people are hiding, along with energy stocks which are rallying due to Syria. It is very possible that the energy rally is an overblown news event, as we saw oil rally sharply early but close near its lows in an ugly candle for the commodity. There is a chance this becomes a buy on the rumor, sell on the news sort of thing if/when missiles head into Syria. The S&P 500 gained 0.27% and the NASDAQ 0.41%. Economic news was not great:
Pending home sales declined 1.3 percent in July, according to the National Association of Realtors. And weekly mortgage applications fell for a third-straight week as average rates hit their highest level in 2013.
We'll take a longer term look today at the 2 major indexes - we can see both in a similar situation. After a breakneck rally in the first 5 months of the year, the going has been much rougher this summer. So it is a typical "sell in May and go away" period. This is shaping up to be the 2nd moderate correction of the year, both coming since late May.
There was not much energy out there outside of the energy sector and some big cap tech oriented names where everyone is crowded into. You can see 3 of these 4 "horsemen" vastly outperformed the market today.
Meanwhile here is what oil did today, usually this sort of pattern where the price surges higher but closes near or at the low on a reversal doesn't bode well but oil will be very headline driven in the coming days.
That said the energy sector actually looked solid today but again this can reverse in an instant on headlines so be wary.