Stocks made a big reversal today, with the major indexes finishing up 1 to 1.5 percent. A couple of things here:
A) Bond yields backed off. Investors were getting very cautious with the recent trend, and applauded this move.
B) The Fed came out with some statements. They said they see "moderate growth." This is probably the best thing they could have said. If things had accelerated too much, investors would be expecting a rate hike. They are talking about consumer spending staying up. I think this is driven more on high-end retailers, rather than across the board.
C) This is options expiration week, and we typically see increased volatility. Look at yesterday, down 130, today up 180.
D) I think investors are really hoping that this bull market isn't over, and are looking for any positive news to buy back in.
I'm still pretty strong on energy stocks, as I've been for the past couple of months. If we see more volatility, I see people moving into more defensive names. So, if we see a drop, I may trim some names in the portfolio like Echostar (DISH) and Garmin (GRMN).