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Short Covering or Start of a Rally? - Real Time Insight

Pardon me for feeling excited this afternoon but the late rally in stocks has put a little pep in my step. After spending most of the morning in negative territory we've seen buyers come in and push the market higher across the board. As I'm typing this I'm seeing Russell 2000 futures get close to 1100, the Dow is up 50 points, NASDAQ 20, and the S&P 7.

Looking at today's intraday chart you can see the buyers came in today shortly after lunch. All this week we've seen seesaw action in the small caps, but we're still firmly above the February low for the Russell of 1082.

Is the rally at the end of the day today just short covering or is it the beginning of a recovery for small caps?

As much as I'd love to say that it's the start of a recovery for small caps, I think this time it was just short covering. The bids came in later in the day on a Friday while most traders were thinking about their weekend already. From a technical perspective there's nothing significant about the price action today. I think we need some sort of catalyst next week to push us one way or the other.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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