U.S. Markets open in 8 hrs 10 mins

It looks like some traders are betting on a bottom

Bob Pisani
Lucas Jackson | Reuters. These are the stocks posting the largest moves before the bell.

The markets started on a very weak note Monday, with the Dow down nearly 200 points at the open. No surprise, the weakest sectors were those that would be hurt if the Trump agenda of tax cuts and infrastructure spending fail to materialize: banks, industrials, and materials. The dollar was heading lower, bond yields were heading lower, oil was heading lower.

And then, shortly after the open, it all turned around. The dollar, bond yields and oil reversed, as did stocks, including bank stocks, and the S&P 500 went positive in the last 20 minutes of the day before ending fractionally lower.

What happened? It's still being debated, but the S&P held right near its 50 day moving average, a key technical level. Second, the Trump agenda may be a bit more iffy, but it is certainly not dead, and the trading community still believes that some kind of tax cut is coming.

Third, earnings season is about to begin and the early signs are very promising: we may have the best quarter for earnings gains in nearly six years (see my morning note for more).

Finally, remember all those people who said they wished the market would drop 5% to 10% so they could buy at lower levels? They have an opportunity now, and it looks like some are doing it. Volume was not heavy overall today, but we did see heavy volume in financial ETFs, that's important because the banks are well into correction territory with most of the big names down more than 10% from their recent highs.

Looks like some traders were indeed betting on at least a short-term bottom for that group.