Strong Accumulation Day

Yesterday was a strong day for the market. The SPX was able to close above last week's high of 1283 and this morning it is attacking the 1290 level.

But the graph above is more important, as it shows the Nasdaq breaking above its overhead 50-day moving average. This could mark a significant change in trend, although there will certainly be days ahead that make us question that premise.

This morning's CPI report was in-line, and further calmed inflation fears. The 10-year yield is plunging to 4.88%. I think the notion of the Fed raising rates at its next meeting is absurd. Oil is lower again today also.

I sense that few market participants are positioned well for a rally to begin in August. The build-up in bearish sentiment has been aggressive, and the potential for further short-covering rallies remains. With earnings season winding down, and the Fed out of the way, I think the market is signaling that we have seen the lows for this year.
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