Although the indices finished Friday's trading session in mixed territory, the market put in an impressive showing as stocks recovered from a very poor open, climbing steadily throughout the day to finish well off their initial lows. Following the previous day's very choppy action and despite some decent earnings reports, indications were for a big gap lower to start the day. Specifically, GOOG delivered very strong results, beating estimates of $4.95 per share by $0.15, while GE met estimates of $0.37 per share. However, sentiment was pressured early in the morning as continuing concerns over the banking industry pushed European markets lower while Asia took a big hit on the heels of warnings from Sony, Samsung and LG Electronics.

Interestingly, despite some disappointing results from the likes of HOG, COF and SLB, there wasn't much on the domestic wires to account for the early weakness, and as a result, it wasn't that surprising to see buyers fade the opening gap. From the get-go, it was obvious where investors would be concentrating their efforts from the day. Materials, energy, technology and financials each saw heavy buying interest right off the open. Meanwhile, even though the other sectors - such as consumer discretionary, healthcare, staples and utilities - did garner some attention, any progress to the upside there was more of a struggle. Industrials, however, were particularly weak, as heavy pressure in the shares of GE proved to be a major headwind.

Nonetheless, the indices were able to work their way higher throughout the morning and into the early afternoon, as each made their way into positive territory a little more than two hours before the close. At their best levels, the Nasdaq sported gains of 2%, while the S&P 500 and Dow were higher by about 1% and just over 0%, respectively, with each index recovering from the 2% losses at the opening bell.  

The mid-afternoon gains, however, proved to be unsustainable, as a fresh wave of selling knocked the market back down during the contra-hour. A final hour upside reversal helped to improve their end-of-day standing, but it wasn't enough to prevent the indices from finishing in mixed territory. When it was all said and done, the Dow closed lower by 0.56%, while the S&P 500 and Nasdaq sported gains of 0.54% and 0.81% respectively. Certainly, volume could have been better, but overall, it was a pretty good day for the bulls.  

As we've been saying, the ability of the indices to hold above its December lows is a positive at this point from a technical perspective, and is an indication that buyers are interested in keeping this market above critical support levels. That said, we're still in a precarious spot, there's absolutely no leadership, and there are obviously major issues with the financials. Concerns over the banking system in the U.K. are acting as a headwind, and the manner in which the financials are trading indicates that investors are anticipating that another shoe drill drop. We'll have to wait to see how things go. We're still oversold at these levels, but we may need to see another wash-out to the downside before any rebound can gain any real momentum.  

Regardless, outside of a few educational stocks, there just aren't any decent individual chart set-ups, and as a result, trading right now is more about gauging psychology than anything else.

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