Day One

Today is the first day of the rally and the market has a decent oversold reading. Anything can happen in markets and this could be a one day wonder. However, the odds don't support that outcome. It would be quite unusual for such  a strong oversold reading not to matter and fo the market to just fall apart.

We have had a lot of one day wonders recently. It is tempting to draw on recent experience but there is an important distinction between those instances and the current one. The market was not yet oversold until now, except on an extremely short term basis. In addition sentiment has become more extreme as well. All this is supportive of the market.

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