Last evening North Korea launched a missile that flew over Japanese territory for the first time ever. This action caused the various stock index futures to take a nosedive on the panic selling overnight. As a result, the DOW plunged by as much as 135 points today at the opening bell before cooler heads prevailed.

With 90 minutes to the end of today’s session, the DOW is ahead by 30 points, the S&P is up a fraction, and the NASDAQ is higher by 14. In addition to a new high for AAPL, gains in BA, CAT and UTX have assisted the DOW in it’s turnaround to the upside today. AMZN, PCLN and TSLA are contributing to the NASDAQ’s positive inclination at this juncture. All of these three former high-fliers have declined by more than 10% in what could be called an official “correction” for them.

To illustrate the oversold market, before today the DOW had been down in four of the five previous sessions while the NASDAQ had been down in eight out of the past 11 days.

The VIX jumped up to 14.34 on the opening panic selling and is currently down to 11.83…still ahead on the day even as the major indices are higher. Perhaps the toned-down rhetoric of the President in reaction to the North Korean missile launch helped calm people when he said that “all options are on the table”.

Despite this nice turnaround, assuming it can hold into the close, today’s action is an example of a market that is banging around in a range with no real impetus. There is some buying on the type of severe break that we saw on the opening.

One reason for the interest in stocks is that bond yields have really come down. The 10-year Treasury Note at 2.10%, it’s lowest point this year. As a result the dollar is weakening again with the Euro now above the 1.20 level for its highest in more than two years. The Japanese yen is up to 108.6 to the dollar. Naturally gold is reacting on the upside to all of this. Currently, the precious metal trades at $1,317 an ounce.

Since second-quarter earnings season is over, the market will concentrate on economic reports. The most important will be Friday’s August’s jobs report. The lineup is: Today – August Consumer Confidence, which came in at the second highest level of the year at 122.9; Wednesday – second estimate of 2Q G.D.P; Thursday – weekly jobless claims, July personal income and spending, August Purchasing Managers’ Chicago Survey; Friday – July construction spending, August University of Michigan final Consumer Sentiment Survey…and the big one for which the estimate is for 178,000 versus the prior month of 209,000.

Donald M. Selkin

Don Selkin is the Chief Market Strategist at Newbridge Securities Corporation, member FINRA/SIPC and provides the Fair Value analysis for CNBC each morning.  The commentary provided in this Market Letter is intended to provide timely market analysis and should not be considered a research report.  This Market Letter may contain, and is limited to: Discussions of broad based indices; Commentaries on economic, political or market conditions; Technical analyses concerning the demand and supply for a sector, index or industry based in trading volume and price; Statistical summaries of multiple companies’ financial data, including listings of current ratings; and, Recommendations regarding increasing or decreasing holdings in particular industries or securities.  This Market Letter does not make a financial or investment recommendation or otherwise promotes a product or service of the firm.   This Market Letter contains only news, facts, and commentary on information previously reported from a news source believed to be accurate and reliable by the author.  These news sources include the following:  Bloomberg Financial, Reuters and the Associated Press. The Daily Market Notes have been abbreviated and updated with permission from the author.