- The market is very oversold on a 10 day basis and will soon be oversold on a 30 day basis.
- There has been a lot of put buying in the past few weeks. Market players have adequate downside protection.
- Rydex traders are positioned bearishly.
- The VIX spiked to levels seen at previous major crisises, after which there was a market rebound. The one exception was the Fall of 2008.
- We are starting to hear extreme downside targets and the bears are getting too loud.
I believe that the bias will be to the upside until June expiration. While we might not go straight up and there will be bumps along away I believe the trend will be higher. My reasons are as follows: