WELCOME VOLATILITY!

The old one says in Wall Street “Market goes up as escalator and goes down as elevator.” Yesterday has happened the reverse of that, the US market rallied massively. SP500 made its biggest one-day gain in 12 months. DJIA hit its biggest one day jump in 2014.

US indices scored their biggest one-day gains this year. The volatility was brutal. Huge gains and losses followed by day by day. Yesterday was the fifth session over the past 10 trading days when the S&P 500 moved by 1% or more. That is a nerve killer.

• S&P 500 +1.75%
• DJIA +1.64%
• Nasdaq +1.90%

How long does it take this rally? Just take a look at the SP500 chart below. The market was pretty oversold and within few hours it could recover rapidly. The sentiment changed within couple of hours from bearish to bullish on the floor. As we anticipated few times in the last days the market close above the 1.960 key resistance level so the area is opened on the long side further gains.

The BFM Assets Team.