A Technical Rebound With Bigger Tests Ahead

By Michael J. Kramer of Mott Capital Management

Founder/CEO at Mott Capital Management, LLC • Jan 21, 2026 at 6:28 PM EST

Stocks finished the day higher, reclaiming some of their losses on January 20, with the S&P 500 hitting the 78.6% retracement level of its Friday closing price.

Stocks finished the day higher, reclaiming some of their losses on January 20, with the S&P 500 hitting the 78.6% retracement level of its Friday closing price. Well, there is not much to say at this point other than the market bounced from yesterday. It is hard to say more than that at this point.

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Much of what we saw likely stemmed from hedges unwinding as fears over Greenland subsided. Meanwhile, the VIX 1Day closed at 12, so there isn’t much vol to crush at the open tomorrow, even following the PCE report.

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The only problem is whether Greenland was the true cause of the market decline on Monday; not doubt it played a role, but the bigger question is how much the sell-off in JGBs the night before had to do with it. 10-Yr JGB rates fell by 8 bps in Japan on Wednesday, but as far as I know, nothing really changed, aside from some nervousness from government officials. The true test will come when the BOJ meeting is concluded on Friday.

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More By This Author:

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