As it was displayed Friday, the daily McClellan Oscillator (NYMO below) was sharply oversold. Generally, this will cause a rally in the opposite direction and it did.

Next economic data Monday continued to be negative. The sole reading today was the Empire State Mfg Survey (-10.74 vs -5 expected & prior -11.36). Naturally this continued the data reinforcing a weakening economy. And, that means “bad news remains good” since it’s construed to mean the Fed can’t raise interest rates. They are data dependent aren’t they?

Last, there’s terrorism with previous reactions have been to show terrorists can’t stop the world’s stock markets from slowing down. 

We started Monday with only a weaker than expected start as markets almost immediately rallied off that opening drop. Stir-in a massive Starwood’s and Marriot deal and we’re off to the races.

Market sectors moving higher included: Energy (XLE), Financials (XLF), Retail (XRT) S&P500 (SPY), Dow (DIA), Healthcare (XLV), Tech (XLK), Small Caps (IWM), Industrials (XLI), Consumer Discretionary (XLY), Consumer Staples (XLP), Materials (XLB), Utilities (XLU), Homebuilders (ITB), Emerging Markets (EEM), Japan (EWJ), France (EWQ), Brazil (EWZ), Crude Oil (USO), and, you starting to get the idea here?

Market sectors moving lower included: Volatility (VIX), Bonds (TLT), little else especially if you were short.

The top ETF daily market movers by percentage change in volume whether rising or falling is available daily.

Volume was lighter than last Thursday and Friday. Breadth per the WSJ was positive. 

So the oversold NYMO did its thing once again allowing short-term oversold markets to rally once again. Other than the NYMO and a few others, no fundaments can explain this move, but that’s how the indicator works.

Tuesday features Industrial Production and a few lesser reports.

Earnings news features large retailers and by all indications they won’t be pretty. Maybe some will beat much weaker expectations, and that can happen.

Let’s see what happens.