On the back of yesterday’s massive rally, the lack of any giveback thus far today represents a slight change in charter from the lack of follow-through we had see since mid-September. I am staying patient in terms of methodically increasing my long exposure back up to aggressive levels, as charts are in the process of attempting to set up properly again on daily timeframes. Nonetheless, many a weekly chart is sporting coiled bases that could easily break much, much higher before the bull is done, such as MTW and TEX.
Bonds and volatility (VIX) are off again today, as risk has shifted back into equities for now. On the upside, the S&P 500 is now likely to contend with the 1390-1400 level, which was so critical back in August. A few more days like today figure to add credence to the bull case for another push higher.
In sum, the pre-Thanksgiving digestion we are seeing today can be chalked up as a “so far, so good” victory for the bulls, barring an ugly close. Look for continued slight changes in character in the market since September if the bulls are going to eventually prevail.
GAINZ
LOL