US equities saw an effective full reversal of the Tuesday declines, with sp +15pts @ 1888. The two leaders - Trans/R2K, settled higher by 0.6% and 0.5% respectively. Near term outlook is moderately bullish into the 3 day weekend, although the bigger outlook still offers major downside this summer.
*I realise, for those on the short side, after the Tuesday declines, today has been an utter disappointment.. you have my sympathies.
From a purely cyclical perspective, today gains were not particularly surprising. For me, the morning gains in the R2K were good, but the weakness was STILL there, and I was stopped out this morning.
A long 3 day weekend looms, and more likely than not, the market will churn quietly into the Friday close. There is a fair bit of data tomorrow, so Mr Market will likely find an excuse to break into the 1890s.
Bigger picture still looks okay for the bears, but it just remains a case of waiting for the bigger monthly cycles to conclusively break lower. The monthly 10MA on the sp' is around 1800, so we're almost 5% away from even testing the key rising trend.
Right now, I'm looking ahead, to the FOMC of June'18, although it is entirely possible we'll be breaking lower before then.
What about the recent GDP reading of 0.1%. What if that is revised marginally negative? I have to believe this market is highly vulnerable to a major multi month fall.
*having exited my index longs this morning, I am more than content to sit on the sidelines until next week.
more later..on the VIX