Stocks inching higher this morning after a huge ramp into the close yesterday. As I talked about in Midday Movers the bulls and bears alike were all watching that 2000 level on the S&P 500 (^GSPC). At one point we got down to 1980, well below support and nearly down to the lows of last December. Then, as tends to happen when things look their worst, the market went violently in the other direction.
By the close we'd tacked on a full 40 points from the lows on the S&P, well over 2% in just a couple hours. That shouldn't be all that much of a surprise. I've been highlighting the expanding average trading range for a couple weeks and all it's done in that time is move higher. That suggests uncertainty, obviously, but it's also typically a sign of a market bottom. That second part doesn't make a lot of sense intuitively but, hey, if trading were easy everyone would do it.
So what drove the turnaround? Sentiment, of course, but also crude (CLH15.NYM). Last Thursday it was trading below $44 a barrel. Today it's all the way back to over $51. The mark to watch is $51.27. That's the intraday high from January 15th when WTI formed a Christmas Tree of Death. If that mark gets taken out you're going to have a lot of people needing to reposition their portfolios in a big hurry.
One last thing. Today is the one year anniversary of the closing low for 2014. History doesn't repeat but it rhymes. In the last 52 weeks, through Ukraine, crude crashes and pure evil taking control of the NFL, stocks have added more than 16%. Like life, trading is about being aware of the hazards but brave enough not to stay in bed hiding all day. Pessimists sell the most books but optimists make all the money. Something to keep in mind as we try to avoid whip-lashing ourselves to death in this crazy tape.