Looking at market sentiment, there may be some optimism returning slowly. Last Friday we saw the three major indices bought by smart money and took the top three net long change positions. Meanwhile, gold became the top seller in the same category. This won't guarantee upside, but it shows that institutions are accumulating positions down here. Further confirmation will come in future weeks of more COT data.

Meanwhile the put/call ratio is hitting an extreme levels for the S&P indicating that fear may be bottoming for now. Again this is no indication of a reversal long term, but it suggests that current bearishness is getting exhausted and the selling may be less aggressive. The only way to tell if we're recovering will come with more time, so all we can do is speculate that stocks are nearing and end to the sell off.
-Frank

SPX500
When we take a step back and consider the situation with oil, it’s evident that something fundamental is breaking within the US economy. Initially, we thought this might just be a market correction, but with oil prices dropping too low to sustain US production, it’s becoming more clear that this could signal deeper issues.

Although the drop in oil prices might help reduce energy costs and bring inflation down in the short term, it comes at a steep price—the potential collapse of key sectors in the economy. If oil continues to fall at this pace, we could see it approaching the COVID lows in the $30s, which could put further pressure on the indices as well.

-Frank

Data from EdgeFinder
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