Yesterday was a dream session, but the nightmare isn’t over – yet.

This is a huge technical test for the S&P 500, which closed at the Fibonacci number – if we can get through here, it should rally to fill the gap (see circle).

Well, they say, ‘what doesn’t kill you will make you stronger,’ and so the Consumer Price Index (CPI), which had been a demon for the stock market earlier in the year, has been a boom in three of the last four releases.

And while history says the market will be higher a year from now, the road probably remains rocky for the next couple of weeks.

Cool Map

We can’t call it a Heat Map when it’s all green.  We can call it the revenge of technology as those mega- cap names interrupted the playing of ‘Taps’ to remind everyone they are not Pets.com.

There were very few specs of red – now, that is what I call green shoots.

Bond…Ten-Year Bond Yield

Look at that Candlestick formation! This could be it, folks…the ten-year bond yield might be ready to come down more to fill that gap at 3.60% - the true test of support is 3.50%

Portfolio Approach

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Today’s Session

Yesterday was a remarkable session, which has sparked a debate over whether it’s another bear market bounce or the turning of the market.

The bears have the soapbox and have been sharing lots of data pointing to the bounce being temporary and urging investors not the take the bait.

Lance Roberts put together an intriguing chart revealing rallies of 5%+ have only happened 23 times since 1964, and most were in the midst of a bear market.

Sometimes, it marked a turn, and other times, it was a bear bounce.  In recent years, it has marked the turn.

Keep an eye on the University of Michigan Sentiment reading. The inflation piece is going to be very important since it was a bigger number in  June, 3.3% (since revised to 3.1%), which made Powell shift to 75 bps from 50bps. 

Thank you to all the men and women that have served to protect our country and our freedom.  We salute you.  Happy Veterans Day.

 

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