Dow: +646.95…
Nasdaq: +139.68… S&P: +53.24…
The stock market began the week on a strong note with the S&P 500 (+1.2%) reclaiming its entire loss from Friday. The Dow (+1.9%) fared even better, rising to a one-week high, while the Nasdaq (+0.9%) managed a firmly higher close after revisiting Friday’s low in early trade.
Stocks benefited from an improvement in sentiment after the weekend went by without any ominous reports related to the Omicron variant of the coronavirus. This opened the door to a rebound in areas that faced the most pressure in recent days with the S&P 500 reclaiming its 50-day moving average.
Seeing lots of oversold reversal candles in many names but that’s not a bottoming signal by any means, important to watch for next day or tow if we get follow-through confirmation.
Percent of SPX stocks trading above the 200-day moving average isn’t overly impressive. Note we are not at extreme levels but have fallen big lately.
The VIX was down 11.0% today, but it’s still elevated and may be bull flagging.
I didn’t add longs today because I still don’t trust this, however that can change in a nanosecond because whether it makes sense or not, I think we can rally into year-end.
Inflation is a killer and I’m just wondering when we will start hearing the ‘R” word on a consistent basis.
All long bets will be off for me at that point.
Charlie Munger said today that he wishes “cryptocurrencies were never invented,” and “admires” China for banning them.
Instead, he bought gold that plummeted with Buffet and got wiped out. He also sold the banks and airlines at the bottom. Careful of the old charlatans.
Extreme fear now. We either crash or rally. I say the latter, days are numbered though. See you in the morning.
