Step one is complete… here's step two…
The inevitable BOUNCE happened just before the Memorial Day holiday break to stop the stock slide. Logically, at some point, profitable positions from short sellers were going to be bought back and banked for big winners. The unrealized gains of those who had moved stops losses down for protection were fuel for the buying bounce. The four major lows of 2022 have each had lower volume and lower $VIX on less conviction each event. Extremely oversold conditions can always get more extreme, set up a situation for the 6% rocket rally to put a solid base in place. STEP ONE is now accomplished, a low that has held for now, though that needs some follow-through confirmation with additional price pop. | |
STEP TWO of the consolidation last week is a positive as the S&P has now straddled sideways between 3800 lows and 4200 with the 4000 level to be watched as a critical support pivot on a weekly basis. A breakout above the 4200 top, and also the halfway point of the April to May drop would be STEP 3 in the march to recovery… The reality of this stock selloff is that the S&P is nearly 10% off the lows and essentially unchanged in the last 52 weeks. Again it is important to remind everyone that the record, forever, ALL-TIME top was January 4 just five months ago. As always it is important to let the markets tell us where they want to go… Best wishes, Alan Knuckman P.S.: I'm looking to take advantage of this momentum and elite money piling back in. To see how I'm planning to do it, watch my interview with Robin Norton talking about how I became one of Wall Street's most hated men. Check it out here. | |
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