Here be the deal.
Friday’s late selling put the odds in favor that Friday’s high, give or take, was the high. Use the low of about 23,800 as important low. That was the low of 2/8…not the low of 2/9, which was the big reversal day.
We give it very little chance to revisit those lows right now. The move up was pretty darn good and cut through a lot of technical damage but…we now expect back and forth action as the market decides if it wants to resume the major trend up or start something not so pretty.
Only about 45-50% of stocks in our universe are now in good technical shape…but a sharp improvement from the lows. This number is not very good and tells us to expect a battle from here.
Areas that are strongest are:
STEEL-off of tariff threats.
REGIONAL BANKS (KRE)
DEFENSE- the budget increases for them markedly.
Lastly, we are watching European markets closely as they have hardly been able to rally off the lows . They are very weak and could augur some ugly going forward.
Will have a lot more tonight as we have been traveling extensively the past few days.