Major averages finished lower but staged an upside reversal off lows on higher, above average volume. The S&P 500 undercut its prior major low of 1812 finishing midbar while the NASDAQ Composite finished closer to the top of its trading range. Though the downtrend remains intact, such high volume partial reversal days can signal a temporary low to allow for sharp bear market bounces where renewed short-sale opportunities will surface.
That said, any bounce may be shorter-lived than expected as the put-to-call ratio has spiked a number of times recently along with bearish advisers persistently outnumbering bullish ones, yet the market continues to fall underscoring the inherent weakness in the averages.
Thursday's rally was triggered after crude oil traded near a 13-year low but then rallied after OPEC discussed the possibility of cutting production. Such talks are not uncommon but so far have not resulted in any firm conclusions on production cuts.
Futures are up almost 1% as oil jumps roughly 5% on continued speculation of production cuts by OPEC suppliers. The Market Direction Model (MDM) went to cash yesterday so all MDM-related positions should have been sold.
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2018 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.