REAL REBOUND OR DEAD CAT REBOUND?

The US markets have broadly gained on Monday, but one day correction means nothing. In the big picture the market is still bullish, but the performance of the market so far YTD is pretty disappointing and in the shorter term shows weakness and bearish attitude. The last week selloff was a horror show. U.S. stocks dropped last week brutally across the board. The S&P500 and Nasdaq both made their biggest weekly losses since mid-2012 and the Dow did its biggest weekly fall since mid-March.

The yesterday rally might be only a dead cat rebound. We can’t be sure this is a good buying opportunity or just a pullback. We need one or two days confirmation about the breakthrough.

The Nasdaq on YTD dropped only 2,20% but from the 7th of March top is closely 10% so we have to see some bounce back, the index yesterday made +0,58%.

• Dow 16,173 +146 +0.91% 
• Nasdaq 4,023 +23 +0.58% 
• S&P 500 1,831 +15 +0.84%

The SP500’s yesterday’s rally shows some good sign, but we have to see the today performance either. Made a break out at 1,818 and now the way up to 1,846 is opened for further rally in the following days. The volatility is brutal and the over positioning is lethal nowadays for investors.

The BFM Assets Team.