Our markets opened lower this morning and traded lower until around noon when the buyers started picking up the bargains and actually recovered all of the losses before the close. SPX closed the day at $1244 with a small $2 gain. RUT gained $2 to close at $740. Trading volume was flat to slightly downward with 3.0 billion shares of the S&P 500 stocks trading today; this is down from yesterday and below the 50 dma. Trading was flat on the NYSE and up 4% on NASDAQ, propelled by trading in the tech stocks after the disappointing Oracle earnings report.

Existing home sales for November came in at an annualized rate of 4.42 million, up from last month, but well below the five million expected by analysts. Early softness in the market was attributed to an ECB report that suggested several European banks would be in need of additional funding.

Today's market action can be considered bullish, in my opinion. SPX traded down as low as $1230 before recovering to end the day with a small gain. However, there is strong resistance in the $1260 to $1270 range, including the 200 dma at $1260. IBD moved to a market rating of "Confirmed Uptrend" yesterday, which surprised me. Certainly yesterday's move was impressive, but it takes more than one day to define a trend. So my view of this market remains that we are trapped in a narrow trading range until sufficient good economic data builds to eliminate the European debt worries or some surprising bad news pushes us over the edge. Of course, this is wonderful news for us non-directional traders, but tough for stock pickers. The VIX closed down at 21.4% today, a little surprising since the market traded down most of the day. In spite of the lower VIX, I still regard this market as an extremely volatile monster that can turn on a dime in either direction. Perhaps I am jaded from the wild swings we have seen this year, or maybe I have learned a valuable lesson.