Equities have rallied very strongly from their mid-February lows when economic pessimism ran way ahead of itself leading to a significant market correction. The US S&P500 corrected exactly into our 1800-1815 target area from where it has now staged a very impressive 9.4% rally; amazingly, we are now only 7.8% below all-time highs for US equities. Last night we witnessed some "internal characteristics" of a strong market. 1) After surging well over 300 points yesterday US equities held their gains, implying this explosive leg of the rally has further to go. 2) The Volatility Index (VIX) fell under 17.5%, compared to the 32% area reached in late January, which strongly indicates that professional investors are again comfortable with equities. 3) Oil rallied almost 1% last night to its highest level in 8 weeks, even after US stockpiles surged 3 times above expectations to put added pressure on the world’s glut. This advance on bad news is a positive and, for now, a strong oil price is supporting stocks. Read our full report: (VIEW LINK)
Please sign in to comment on this wire.