Reflex bounce

• As expected market bounced back strong today after multi day down move. Volume on the move was higher than Monday volume.
  
• It was a good set up for a reflex bounce. Market was going down for almost 10 days without respite. Most mean reversion systems were signaling a buy. 
  
• When market go down a lot and general mood becomes pessimistic and those late to short selling start becoming bold, then market has one of these reflex bounce. Heavily shorted and beaten down sectors tend to rally in such bounces.
  
• 12 sectors were up 10% or more
  

1. MG412,Regional-Northeast Banks
   
2. MG413,Regional-Mid Atlantic Banks
   
3. MG414,Regional-Southeast Banks
   
4. MG415,Regional-Midwest Banks
   
5. MG423,Asset Management
   
6. MG425,Credit Services
   
7. MG442,Reit-Office
   
8. MG444,Reit-Hotel/Motel
   
9. MG631,Residential Construction
   
10. MG712,Resorts & Casinos
    
11. MG742,Toy & Hobby Stores
    
12. MG832,Semiconductor-Memory Chips
    

• If you look at them, all most all are beaten down sectors.
  
• As expected the Gold and Silver sector were the two sectors down more than 5% today. These kind of defensive sectors are always vulnerable to pullback in such reflex bounces.