What was best is now worst and what was worst is now best!
The rally we called for on Feb 11-12 continues but we now believe that overall, markets are due to rest. Very simply, markets are beyond overbought. But the good news is that overbought will cause pullbacks but the fact things got so overbought is a good thing. But what interests us more is what is happening underneath the surface. Our motto is now “what was best is now worst and what was worst is now best!
In our last report, we told you that just about everything that wasn’t working is now getting the biggest bid. Keep in mind, many names from these areas were down 50-90%. Yes…there were 90% drops in many commodity names.
The areas with the biggest moves were steel, copper, aluminum, energy, commodity countries and the like. Late Friday, it looked like they tired out as some names ramped up 50% in just days. Keep in mind, a stock that drops from $50 to $5 and rallies to $7.50 is not thrilling.
We do want to make you aware that while we saw some serious fireworks in the worst areas, the best areas of 2015 hardly budged. This needs to be watched as biotech and a bunch of big-cap internet/tech just aint happening.
Bullishness has now picked up as the bear’s smiles have turned into frowns. Things have improved as the floor has picked up. Just realize all that has happened is the worst areas have recovered some while the markets have now rallied back into resistance.