Maybe all the rally needs is the right spice.
The open’s rally effort died at the hands of Fed Chair Yellen’s impersonation of her predecessor. At least Greenspan delivered his 1996 “irrational exuberance” speech overseas, overnight, which was easier to absorb. Yellen’s comments called out specific financial assets by name.
Most harshly affected were momentum stocks. Several are reporting this week, including INTC and YHOO after today’s close (GOOG and IBM are tomorrow). Might their earnings give the rally reason to resume?
Live by the momo, die by the momo?
Subdued volatility is common ahead of high-profile earnings. This afternoon could buck that trend by continuing to snap back up from the morning’s rubber band stretch. The bias environment has ranged around the 1969.50 bias-up target, above the noon hour’s range, and the final hour is approaching — entering it above 1971.00 would likely trigger a short-squeeze.
Back under 1966.75 would signal momentum reversing down. Oversold RSIs at the 1958.75 low would want to be retested, but impending earnings would make fresh lows difficult.