Investors Business Daily declared Friday that the uptrend has resumed. I am inclined to agree, but I remain wary (old scars). SPX had a huge day Friday, so the bears were looking to take it back today, but it didn't happen. SPX opened at $1937, traded down as far as $1920, and then recovered to close at $1939, down one dollar on the day. This resulted in another of those candlesticks with a long lower shadow, a bullish sign. RUT had a similar day, closing down $3 at $1032. Volatility contracted just a bit, closing down 0.3 points at 19.9%. VIX has only been under 20% one other day this year. Trading volume fell off from Friday with 2.8 billion shares of the S&P 500 trading. Trading volume on the NYSE dropped 10% and trading on NASDAQ was also down 10%.
Construction spending for December increased 0.1%, not great, but better than November's 0.6% decline. The ISM manufacturing index came in at 48.2 for January, up slightly from 48.0. Recall that numbers on this survey less than 50 represent contraction, not expansion.
ADP's private payrolls and the ISM services report are due on Wednesday, and the jobs report will be issued Friday morning before the open.
I think we have seen the worst of the correction, but I don't see much to fuel the bulls for a strong rally, so we may be in for some choppy sideways trading for a while.