Lower lows on Monday kept an ominous Halloween glow hanging over the market. But once again the market’s tendency to act like a cheap drunk who remembers nothing about what they did and with whom the night before took effect. A small gap-up open blossomed into a rally early yesterday, but the market then began to waver again, looking like a replay of Monday’s ugly action was in store.
But the market held its ground even after dipping into the red and rallied in classic oversold melt-up fashion into the close. This was a notable difference given the prior melt-down-into-the-close type of moves we have seen in recent days. Thus, the oversold, v-squared condition took hold and the indexes continued higher today as beaten-down stocks of every stripe finally bounced off their extreme lows.
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