The major stock indexes gaped up at the opening Tuesday morning after the news that China's fourth quarter GDP climbed 8.9% from the prior year. Even though that marked a deceleration from the 9.1% annual rate posted in the prior month, it proved better than what had been anticipated by many analysts. Retail sales and industrial production for December also posted double digit increases over the year. Early traders also gave a positive response to an upbeat economic survey from Germany.
This was a reversal of fortune from the negative that futures held throughout the weekend.
Although the early advance took the S&P 500 above the 1300 line for the first time since this past summer, the broad market measure was unable to sustain that level.
The Nasdaq market was stronger throughout the day and closed well above the previous close, while the S&P 500 essentially closed its gap. This was due to the finacials not holding up well and theya re a big part of the S&P 500 index by weight.
A positive reaction in the way of support to the mid days drop from the early high was encouraging as volume came in heavy and raised both averages forming bottoming tails in the last hour of trade.
It is hard to read too much into this though. while that last hours trade was clearly bullish price action there is heavy resistance right above the current area, and the markets have opened up with gaps in recent trading days. Not a envirnoment condusive to overnight holds. With that in mind, and earnings season getting started it is anyones guess where things may open up the next day.
Trade with a plan