Stock market closes only modestly lower than its opening level

It is always fascinating to see days where the market opens down sharply but ends the day with only a very modest decline below that opening level. NASDAQ closed only 5.06 points below the opening level which was 29.53 points below the previous close. NASDAQ had been as low as another 20.84 points below that closing level as day traders were likely "testing" the market to see if it was ready for a more dramatic correction, but it wasn't, so the market recovered a fair amount of that intra-day loss.

 

Traders made yet another valiant attempt to push the Dow below the 12,000 psychological level, and even managed to push the Dow down to 11,940.86, but there wasn't any real interest in that level of pessimism, so the Dow also bounced back, closing 80.53 points above that intra-day low and a mere 46.09 points below the level shortly after the open. A loss of 163 points for the day is certainly disappointing, but the failure of the "risk off" gang to build substantially on the initial losses was good news.

 

I'm sure traders and short-term speculators intend to "test" the market further in the coming days, which will give us a lot of volatility as they continue to probe for weakness, and to determine whether the market really is ready to sustain another "leg up" or may be so exhausted that trading back down in the trading range may be warranted.

-- Jack Krupansky