There has not been much in the way of corporate news, although Best Buy (BBY) did report positive earnings and its stock is higher.
In economic news, retail sales for May fell 0.2%, but that was not as bad as the -0.7% slowdown that many were expecting.
Asian markets were mostly higher overnight after China report consumer and producer price reports that were generally in-line with expectations. China's central bank did raise the reserve requirement ratio by another 50 basis points, as had been widely expected.
The dollar index is flat so far, while most commodities are higher. Gold prices are up slightly to $1522, and oil prices have bounced above $98 after yesterday's sharp selloff.
The 10-year yield is higher to 3.07%; and the volatility index is down a sharp 8% to 18.0, but still above its 50-day moving average near 16.95.
Trading comment: Yesterday we took off some of our short-term hedges in anticipation of a bounce. While the market is strong out of the gate this morning, I am hoping that this bounce turns out to be more than the 1-day wonder like we say on May 31st. That said, I still think it is a good idea to use any strength to cut weaker positions, ones that are low conviction, and raise cash to prepare for another downdraft. That will put us in a better position to weather the volatility, and have capital to add to our winners when the dust finally settles. One thing that does make me think this bounce could last a bit is that bearish investor sentiment is hitting some extreme levels on several of the indicators that I follow.
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