Following last weeks fugly sell off, traders were hoping for signs of a bottom. 90% down days — like the one we saw last week, with 90% of the volume and 90% of the stocks are both to the downside — can lead to a tradeable low, if not a firm bottom (heh heh).
Yesterday’s not unexpected face-ripper was of comfort to the bulls. The advance yesterday was stronger than Friday’s modest bounce. We would have preferred more insitutional endorsement; note that volume at 5.2 billion shares was well below the 7 billion shares traded on Thursday’s 90% Down Day.
The rally was broad based, but according to Lowry’s technical services, not quite a 90% up day (NY Up Volume was about 87% of total versus Friday’s Up/Down Volume of 69%. That’s a bit surprising in light of the strong price action, anyway.
Lowry describes this as a typical “rebound rally” that follows 90% Down Days.
The Quarter ends Friday, and its worth noting that the next few days may have an element of window dressing to them.