Conditions were very ripe for a big move -- we just needed the right spark. The irony is that no one seemed to think a spark was possible, which is exactly why conditions were ripe.
My thesis the last few days has been that the very high level of skepticism, combined with poor positioning and favorable seasonality, created good conditions for some upside. If we started moving, there would be a mad scramble to cover shorts or find some long exposure. Very few are well positioned for this sort of action today, and I'm sure frustration is quite high.
The big question is whether we can build on this move further. We obviously have overhead resistance to contend with, and we are going to be overbought quickly, but as I discussed yesterday afternoon, this market has a strong inclination toward V-shaped moves. Betting on failed bounces has been a loser for a couple years.
Today's move is going to create a huge amount of performance anxiety, and it is going to cause a lot of anxiety for dip buyers that were scared out a week or so ago and now are cursing the fact that they didn't add lower when they had a chance.
Although I've been bullish recently, I'm underinvested like many others. The job now is to find new inventory. Entries will be tricky, but I think we will have some upside momentum to trade for a while.
I now have some hearing in my right ear for the first time in 20 years, but my brain is going to take some time to learn how to process it. Thanks for all the encouragement. I appreciate it. Now let's find some trades.