Tuesday was almost a mirror image with the sectors in reverse as 8 of the 10 major groups rose. The Nasdaq underperformed falling .2% with the S&P 500 rising by .2%. Both indexes finished well off session lows. If the Nasdaq loses ground Wednesday it would be just its second 3 day losing streak since mid January just to give you an idea how strong the benchmark has been. Energy and materials groups were the winners today both higher by more than 1%. Is the energy rebound which has been gaining steam slowly recently a sign that the economy is picking up or just an oversold bounce? Does it really matter if you are an investor, no because we just follow the price action and it has acted well, with many names in the last couple months shrugging off a weaker crude price. That type of divergence is usually a good sign. Is it to late to join the party? Probably not with many names, even the leaders still 20% off former 52 week or all time highs. You would be even hard stretched to find names trading above their long term 200 day SMAs. If you are a believer in the economy firming narrative how does one explain the warning from NSC today. Do you want to blame it on coal, or are forward thinking investors thinking the crude rail shipments will start to flourish as the price potentially improves? The stock has been under steady distribution with heavy volume weekly losses of 6.2, 5.5 and 4.1% the weeks ending 3/27, 1/9 and 12/5. Tuesdays action however certainly had the look of capitulation and it CLOSED above the big round par figure.
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