Traders found plenty of beat-up stocks at what appeared to be bargain prices after yesterday’s huge sell-off. So the buyers dominated today’s market, in contrast to yesterday. SPX gained $13 to close at $1755 and RUT closed up $8 at $1103. Trading volume fell off from those record levels yesterday with 2.75 billion shares of the S&P 500 stocks trading, but this is still well above the 50 dma at 2.2B.  Trading volume dropped 12% on the NYSE and declined 18% on NASDAQ. The VIX opened the day at 20% but closed at 18.7%, down almost three points from yesterday.

The only economic data came in the form of the factory orders report, with a 1.5% decline in December. This was in contrast to the +1.5% increase in November. Apparently, the market believed that was already priced into yesterday’s market drop.

With the S&P 500 down almost 6% for this year through yesterday’s close, one has to be wondering if the correction is over or just getting warmed up. Of course, the usual cast of characters have come out of the shadows with their doomsday scenarios of corrections of 20-30%. Those predictions do succeed in drawing attention and selling books. Evidence for the bulls' camp came from the fact that SPX didn’t sell off into the close; it closed near its high for the day. But I won’t breathe easier until SPX closes above the resistance level at $1773 to $1780. That was the strong support level that held the market for a week. Breaking back through that area to the upside will be a very bullish sign.

AAPL was the only “green” stock on my screen yesterday. I think playing that $495 close a couple of days ago as a long term low makes a lot of sense for a high probability trade.