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Indexes rebound to unchanged on the session

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Buyers have once again been able to get the major indexes to reverse session lows on what had been a session driven by "bad news" as consumers confidence fell to levels not seen since just after the 09/11 terrorist attacks.

There hasn't appeared to be an intra-day news to stimulate today's late recovery in stocks, and the Dow Industrials (INDU) 7,880 +0.28% has been able to claw its way back with a 20-point gain.

The broader S&P 500 Index (SPX.X) 835 +.24% has moved back above our WEEKLY S2 of 822.80 (see 01:00 Update) and now has bears once again assessing resistance back into the 835-840 zone of resistance.

The tech-heavy NASDAQ-100 Index (NDX.X) 996 +0.13% has just moved into positive territory with a 1-point gain, erasing a 2.7% deficit from earlier this morning.

The Combined Telecom Index (IXTCX) 113.98 +2.37%, which had just turned marginally positive at the 01:00 PM EST update has been able to extend gains to its best levels of the session, with Dow component SBC Communications (NYSE:SBC) $21.30 +2.6% continuing a rebound.

Home Depot (NYSE:HD) $22.81 +2.84% continues to edge out SBC for today's Dow gainer, and helps the S&P Retail Index (RLX.X) 255.24 +1.28% reach its best levels of the session. Sector action in the retailers trades against today's earlier reported confidence numbers and may hint that sector bears are buying some bad news in the group. Dow component and discount retailer Wal-Mart (NYSE:WMT) $48.30 +1.38% jumps back above its shorter-term 21-day SMA of $47.80. The 50-day SMA at $49.25 has been a moving average of resistance for WMT since it broke below this intermediate-term moving average in early December, and may be a level for broader market traders to monitor in coming sessions. In October of last year, WMT was one of the leading Dow components to the upside off the bottom and a good stock to monitor not only for "consumer sentiment," but market sentiment as well. Just after the terrorist attack on 09/11/01, WMT traded a low of $43.58. With consumer confidence at 09/11 level and WMT trading some $5 above the post 09/11 lows, this may once again be stock that traders and investors monitor for leadership back to the upside.

Volume levels have built to the 1.1 billion traded at the NYSE and NASDAQ volume of 1.05 billion isn't far behind. While today's rebound in stocks certainly look to be short-covering related, the rather light volume levels seen in recent weeks has traders having to account for the kind of intra-day swings we've been seeing in recent sessions, and reducing trade size looks to be the best strategy for those not able to watch things on an hour-by-hour basis.

Jeff Bailey

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