The general market, after Tuesday’s bounce, followed through today for big gains across the board, made all the more bullish by coming back from a deep gap down.
The Dow, or instance, was down 500 points at the open and finished up 230.
The question now, of course, can there be more tomorrow.
All indications are this correction is over with many of the indexes touching their 200 daily moving averages, with my nifty-50 list of momentum stocks triggering 30 buy signals in the past two days (Monday all but two of those stocks were down, today all but six were up), with CNN Money’s Fear and Greed Index finally lumbering up off a very low readings at 12 today (it got as low as six and can’t go below zero). That later index is still registering “extreme fear” which is the time a time for investors to be looking to buy stocks.
But most importantly (see the chart below), short-term breath put in a low above a low in negative territory, a divergence with the SPY Tuesday which needed a follow through into positive territory to turn the all-important long-term breadth up. The follow through came today.
All three of my swing-trading signals, based on price, breadth and volatility, are on buys now.
So this market bounce has more to come and could morph into a full-fledged multi-week rally.
Some notes. AAPL is probably the safest bet during a market bounce (emphasis on “safest”) but NFLX, NVDA and TSLA will probably out-perform among the big boys. Look at TSLA today, up 7.5% on the day and 13.7% from the open — there was some dope just last week predicting Elon Musk’s baby would go bankrupt.