Yesterday morning we credited the then equity market selloff to a dire headline related to COVID and a market-rattling one suggesting President Biden's bill was kaput.
Well, stocks are bouncing back so far this morning on, lo and behold, the following:
"Signs President Biden's economic agenda can be salvaged, paired with optimism vaccines can tame omicron, sent U.S. futures and global stocks higher."
With regard to Biden's plan, while politics are (to put it kindly/mildly) messy, when one understands the actors' constraints (more so than their preferences) one can somewhat accurately anticipate coming moves.
Let's do a quick check of the technicals.
Note first that headline risk right here remains huge! So take the following with a grain of salt...
The 60-minute SP500 chart looks decent:
Price is breaking out (to the upside) of a bullish falling wedge (top panel), while the momentum indicators (bottom two) look constructive.
Essentially the same for the 2-hour chart (although not quite as much in terms of the relative strength measure [bottom panel]):
"The technician learns to be comfortable in a situation where market movement disagrees with the so-called conventional wisdom. A technician begins to enjoy being in the minority. He or she knows that eventually the reasons for market action will become common knowledge. It is just that the technician isn’t willing to wait for that added confirmation."