U.S. stocks finished higher Monday, extending last week’s gains, as investors shrugged off a weak reading on the manufacturing sector.
The Dow gained 67.78 points, or 0.4%, to 17545.18, springing back from a loss of as much as 136 points shortly after the opening bell.
New York state manufacturing sector showed that business conditions weakened to the lowest level since the 2009 crash. I guess that can be construed as a good thing, because it can put the rate hawks in time out. We will see.
Bottom line, it was a constructive day for the market, but the bulls need to show that they are real and keep it going. The S&P is down 1.6% so far in August, not impressive by any stretch, so it needs to play some serious catch up.
Biotech caught a nice 2% bounce today, but still needs a lot of work, so it really is tough to trust these bounces. Also keep in mind that this was the lowest volume day so far this summer.
The one bullish contrarian item is that bears seem to outnumber bulls at this point, based on sentiment and put/call data. This has been a bullish stat in the past, so maybe we can in fact get a nice rip going here.
We haven’t done a whole lot from the long side recently, but as you know that can change on a dime. I have some setups in the crosshairs, both long AND short, but honestly some charts have been damaged, so I’m waiting.
If you asked me right now to give you reasons to be bullish and bearish, I could probably give you ten solid reasons on both sides.
Bottom line, the charts need a little more work and patience always pays when trying to get it right.
See you in the morning.