From Waverly Advisors, some interesting thoughts on yesterday’s big market comeback:
It would be hard to imagine a more unexpected scenario than yesterday’s trading session in the US Equities markets. We opened gapped down to levels from which the market ―should have melted, but buyers quickly stepped in and lifted the market above the previous day’s low. The bulls were in control the entire day— after completely traversing the previous day’s range, the market closed strongly on
Sometimes, the market sends the strongest signals by following the most improbable price path, and yesterday was certainly a warning shot across the bow for aggressive shorts in this market.
Even with Friday’s big plunge, what’s definitely true is that the market is behaving differently than it was earlier this summer, when the norm was: rally during the day, fall in the final hour of trading. But then, everything from the euro to gold was trading differently in those days, so it’s hardly a surprise that we’re seeing new, unexpected behaviour in equities.
Photo: Waverly Advisors