U.S. Stocks Roar Back This Afternoon–What’s That All About?

U.S. stocks after being deep in the red this morning, came roaring back this afternoon. Or at least technology shares did.

The Standard and Poor’s 500, which had been as low as 2583 today, climbed back to close at 2637. The swing from high of the day to low was a huge 64 points. The index closed up 0.18% on the day.

The big winners were anything tech that had positive momentum before the sell off of the past couple of weeks. Among the big names, Adobe Systems (ADBEWealth Strength IndexAAPL is Extremely Up and trending Up) closed up 2.78%: Microsoft (MSFTWealth Strength IndexAAPL is Extremely Up and trending Up) was higher by 2.84%; Nvidia (NVDAWealth Strength IndexAAPL is Extremely Up and trending Up) finished up 2.83%.

Smaller momentum stocks, like those in my bounce, bigger bounce, and January Effect Rally lists also did with with Sangamo (SGMO) ahead 2.87%; Twilio (TWLO) up .93%; and West Pharmaceutical Services (WST) higher by 1.54%.

But not everything recovered this afternoon.

U.S. crude benchmark West Texas Intermediate close off 3.57% on the day. Commodity producers such as First Quantum Minerals (FQVLF) and Freeport McMoRan Copper & Gold (FCX) were off 3.13% and 2.29%, respectively. China stocks, by and large didn’t move up. Tencent Holdings (TCEHY), for example, was down 1.21% on the day.

And banks continued their sojourn in the wood shed. Wells Fargo (WFC) was lower by 2.71% on the day and Bank of America (BAC) was down 2.56%.

One afternoon’s recovery doesn’t a bounce–let alone a rally make. But I think there’s a good chance that we’re watching some of the short positions–in technology at least–that traders had put on in the past week start to unwind. The big uncertainty is how many other sector might get sucked into the updraft. Banks look likely to continue in their downward trend for a while. And the China worries depressing China-related and commodity stocks haven’t yet shown signs of dissipating. But I think today’s action suggests that investors and traders should avoid across the board bottom fishing.