THE CLOSE

After last Friday’s action, we stated that A low was put in for the market. This means for the near term, the lows of last Friday would hold. We said that because of the high volume reversal that occurred that day combined with the high volume reversal from a couple days before combined with extreme bullishness turning into extreme bearishness in short order. We suspected upside testing.

But this upside testing is much much stronger than we even thought…and by far.  Our thought process had us believing it would only be a matter of time before the lows were revisited and possibly taken out as bear phases usually have three legs down. Maybe the 12% move was just one ugly leg down. We do not believe this is just a bounce from oversold conditions. It feels more like a low of consequence has been put in and think the lows of last Friday will not be revisited not only in the short term but at least in the intermediate term. It is that strong.

Many areas have moved back above the 50 day but what has us more confident is the way the growth leaders are reacting as well as the commodity areas. Add in that the financials (especially regional banks) are on the move again.  Also, do not forget  today was another weak open which was bought up.

Anything is possible when it comes to the recent action we have been seeing but as more cards come out of the deck, most of the cards have been positive. Stay tuned. We  suspect more wild swings ahead.

Finally, prayers go out to all affected by another senseless tragedy in Parkland Florida. We know the area well as we lived right next door in Boca Raton for many years.  A beautiful community that has to experience the unimaginable.