In what appeared to be a rout to the downside in the first two hours of trading, with the Dow Jones Industrial Average down over 200 points, the stock market staged a huge intraday turnaround with some indices finishing down slightly, some up.
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The DJIA erased the majority of its 200 point loss to finish down 51.28 points and close at 17,801. The S&P 500, down nearly 25 points, finished fractionally lower by 0.49 to close at 2,060. The Nasdaq, down almost 66 points early on, finished higher by 25.77 to close at 4,766. The Russell 2000 gained 20.85 points to close at 1,188.06.
The S&P 500 Trust Series ETF (SPY) volume traded over 124 million shares on Tuesday. This was roughly 50% more volume versus its year-over-year average.
Going forward the rest of this trading week, what does it all mean and where do we go from here? The technical indicators under the surface seem to suggest that some things have changed, but just slightly.
For example, it seems as though the selloff in the markets yesterday and today have pushed the three major stock indices closer to oversold territory. That should allow for a continued upside move in the markets later this week.
Under the surface, many stocks appeared to be in oversold territory. Stocks such as Apple (AAPL) , Tesla Motors (TSLA) and Yandex (YNDX) appeared to be deeply oversold this morning when they were down. All three stocks staged huge intraday reversals to the upside.
Once again, the Russell 2000 index seems to be leading the other indices. The Russell is now within 20 points of its 2014 high and all-time high.
Again, for those who are looking to buy oversold stocks within a bullish market trend, it continues to appear that selected oil and energy stocks are the most oversold. Southwestern Energy (SWN) and Noble Corporation (NE) performed well on the upside on Tuesday with those oversold signals. Encana (ECA) is another stock that seems to have an extreme oversold signal.