ANOTHER GAP TO THE UPSIDE

They wouldn’t dare reverse another big gap to the upside. Would they? Recently, just a bunch of gaps to the upside and downside with ridiculous intraday action leading to reversals. But:

Using the DOW, after a 2,800 point drop in 18 days…after a 2,150 point rally in 8 days…after a 2,000 point drop in 9 days…after a 1,700 point rally in 6 days…after a 2,100 point drop in 4 days (yes, 4 days)…after a 600 point reversal to the upside on Monday…after a 600 point swing yesterday leading to a downward reversal…we are gapping up nicely again today. Maybe it is a good time to legalize weed! (We don’t touch the stuff!)

But after all this…after all the gaps…after all the reversals…after all the news…after all everything…THE LOWS ARE STILL HOLDING! This remains potential good news. We use the word “potential” because if at any time THE LOWS are really broken, we expect all hell to break loose. But…THE LOWS ARE STILL HOLDING and as long as they hold, the market has a chance. Yes, it is beat up. Yes, the internals are horrid. Yes, the all-important financials act terribly. Yes, we are getting nonsense from DC. (Did you watch Donald, Chuck and Nancy? SNL has their whole show this Saturday from just 15 minutes!) But…THE LOWS ARE STILL HOLDING.  We called near term lows on every low in the past 2 months but we must tell you, we remain amazed that the indices are not worse.

So we end this missive with another huge gap to the upside. We outlined potential positives this week with the Fed once again the most important. We believe they have to raise rates one more time but will yap market friendly stuff as their main goal, prevent markets from worsening. Also, it’s December and maybe light at the end of the long tunnel on trade. Don’t blink!