Nearing a Bottom

I would not extrapolate too much from Friday's price action but based on the amount of time that has passed since the February 5th closing plunge and the inability of the market to get below 2640 tells me that looking for a bottom is the best approach now.  The time to look for shorts has passed, and unfortunately, I wasn't able to catch the low risk short last week.  That doesn't mean that we are going straight up from these levels, but it does mean that the more forgiving side, which is usually being long, is even more forgiving at these levels and at this time point in the rally. 

In a market with a steeply rising 200 day moving average, the selloffs will usually not last more than 1 month.  It has been 4 weeks since the February 5th panic, and that means a bottom is due almost any day now.  If I was forced to hold a position for the rest of the month, it would be long.  If I had to hold now and sell in 3 days, I would probably be slightly short. 

Interest rates are starting to stabilize, which is another positive sign for the equities.  Even with a hawkish Powell, bonds have regained their negative correlation to equities, and have done their job of providing downside protection when stocks go down.  There is still the nonfarm payrolls number on Friday and the CPI on Tuesday, but they will probably not be big market movers because the market is now prepared for any hot numbers to come out.  Very different than last month when the market was much more complacent about economic data. 

It would be ideal to have stocks dip down to strong support around 2630-2640 for a low risk long entry, but that might not happen.  If we don't go down this week, it probably will just keep grinding higher for the rest of month.  Get ready to buy this week if the last remaining weak bulls throw in the towel.