U.S. equities whipsawed back and forth yesterday, closing in negative territory, albeit better than the lows of the day. After opening significantly higher on solid earnings report, the Dow, Nasdaq, and S&P 500 all retraced lower into the afternoon on fears that the economy continues to risk double dip. For the day, the Dow actually traded in a volatile 200 point range ultimately closing down 30 points for the day. The afternoon push higher was somewhat impressive, but hasn’t carried forward to today as futures are pointing to a weaker opening. 

 U.S. equities registered its second best week of the year with the Dow, Nasdaq, and S&P 500 gaining 3.2 percent, 4.1 percent, and 3.5 percent respectively. The gains were attributed to stronger than expected earnings reports late in the week coupled with abating fears of a double dip recession. More importantly, the S&P 500 closed above 1100 (1102.66) for the first time in over a month. From a technical perspective, 1100 represents a key psychological support level to the downside.

 U.S. equities staged an impressive comeback yesterday after opening up markedly weaker and trading in negative territory for much of the day, with the Dow, Nasdaq, and S&P 500 all closing well into the black.  This move was attributed to reports that China continues to artfully manage its pending real estate bubble coupled with a rumor that the Federal Reserve was no longer going to pay interest on excess reserves in a move to spur lending and increase liquidity in the markets. Ultimately the Fed rumor was denied, but not before the bulls took control late yesterday afternoon.

 U.S. equities ended on a sour note on Friday with the Dow, Nasdaq, and S&P 500 registering declines of 2.5 percent, 3.1 percent, and 2.9 percent respectively. After staging a nice week long move to the upside, the risk trade once again came off the table as investors reassess the outlook for a sustainable economic recovery and the prospects for a double dip. While history suggests the odds of a double dip are negligible, the economic data in the past 4-6 weeks invariably points to a slowdown in the recovery.

 After two months of selling pressure, U.S equities finally caught a bid this week as value investors snapped up stocks on extremely oversold conditions. For the week the Dow, Nasdaq, and S&P 500 have gained 4.7 percent, 4.0 percent, and 4.7 percent respectively. More importantly, the S&P 500 rallied sharply above the key technical level of 1040 and close yesterday at 1070.25. 1040 is proving to be quite the pivot point that is driving trading action in the short-term.