Signs proliferated during the weekend that the recent sell off was aging: improving Nasdaq relative strength, extreme bearish readings in terms of the number of stocks below their 50-day moving averages, and a very high put/call ratio (closed over 1.2 Friday and remains elevated). Also, recent strength in the dollar has found price meeting up with its 200-day moving average, a possible area of resistance (the dollar settled back today), and a retracement of dollar gains may bode positive for equities in the short run. There is plenty of focus to sell (and short) the bounce, so perhaps (respecting contrary thinking) that some back filling will lead to modest gains or at worst a trading range market for equities.
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Forecast Update for May
4 weeks ago
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