We remain in rally mode off of some of the most oversold, stretched and extended conditions to the downside we had seen since the 87 crash. Price on the upside has still not satisfied buyers. We are now in the midst of massive overhead resistance, the place where the ‘waterfall” dropped occurred. We are not yet to the declining 50 day moving average which is below the longer term 200 day moving average. In and around there will define what this rally means. We believe this rally is unlike the two rallies in October and November that failed miserably but we want to see how the market reacts to a couple of stalling or pullback days. So far, there has been positive rotation on the way up. Also, foreign markets have been up off their lows. They have lagged badly since last February.
The bears now trying to figure out what went wrong and why we are rallying. Just take one part extended to the downside combined with the Jay Powell “put” and away we went. That’s all. Need not look further than that. You know how much emphasis we put on these central banks that refuse to let price be discovered. Bear markets are against their religion. Again, we had better not get to the point where markets ignore their wishes. Looks like we are not there yet.