| | |

Short note on another gap to the upside!

Another gap to the upside this morning and lots of questions. Let us repeat our thoughts.

We are now in rally mode of unknown price and time. We came to this conclusion because of the “sold
out” action we again saw on Feb 11-12.

We have seen these rallies before. All have failed miserably. Will this rally also fail? We will again answer the same way. Our best guess is that this bear market has not breathed its last breath but that thought does not enter the equation right now. All we care about is that we are in rally mode until we aren’t. Remember, bear market rallies typically last 4-10 weeks.

The next question we are asked: Is it possible we have seen THE lows? We know we have said this on numerous occasions but it bears repeating. When you have central banks around the globe not only with the 0% interest rates, not only with negative interest rates, not only with the printing of trillions of dollars but with the admittance they are actually buying up stock markets with an unlimited amount of conjured up money, we cannot take anything off the table. Eight fedheads speak this week. Yes…that’s 8!

We are in “rally”mode until markets say otherwise. Otherwise means distribution days and severe selling. We cannot predict when that occurs but will know when it does occur. Keep in mind, there remains a clear lack of leadership but everything is coming off the lows right now…and yes, that includes the energy complex. Stay tuned and don’t blink!

Gary Kaltbaum