One day does not make a trend and negative factors continue to impact the market in spite of the strong advance today. Today's up volume is lower than past large up days in the S&P 500 Index. This could be a sign that the buying strength was due in large part to short covering.
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We are now seeing some positives noted in prior posts that could provide a better tone for companies and investors:- House Financial Services Committee Chairman Barney Frank and Senate Banking Committee Chairman Christopher Dodd today said they support reinstating the so-called uptick rule.
- Senate Budget Committee Chairman Kent Conrad (D-N.D.) said Tuesday that President Obama's budget plan doesn't have enough support from lawmakers right now to win approval.
Beyond my concerns for fundamental aspects of the economy (the inventory to sales ratio continues to move higher), I still believe we may yet see a capitulation trading day.
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