One characteristic of a strong market--and a great sentiment indication--is the ability of stocks to absorb bad news and sustain buying interest. We saw strength in the preopening market going into the GDP announcement at 7:30 AM CT, but when the news came out worse than expected, we sold off quickly on high volume. That led to a quick bounce and a retest of the lows on much reduced volume. When we could not sustain those lows, buyers entered in force with strong NYSE TICK and we broke above the overnight highs to test recent multi-day highs. Knowing expectations for economic releases and seeing how markets trade around surprises and disappointments can be quite useful in setting up morning trades.
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