An upside frenzy makes 'lots of sense' from the divergent buy signals we'd spoken of earlier in the week; and the excessive short-selling (yet again) from persistent bears looking askance at the crowded short trade 'or' convergence of a number of trend lines that caused so many to presume it had to break but did not change our view of an irregular and erratic bottoming configuration.

I made a point that we can look at these two weeks of the Dollar easing as a 'plus' for the market rallying; and it is not grasping at straws but very important given flight capital that had been insanely chasing U.S. financial assets. 

Meanwhile, I was confident what we had was a break and washout of techs, and mega-caps in general, setting up a rebound. I do not believe it's all going to be for naught; though of course geopolitical developments could impact all of this; but those developments might be favorable not devastating. (Such as the current entrapment of many Russian troops in or around Kershon could be a stimulant for Russia to withdraw or negotiate, but we'll see.)

In sum: Earnings were not key; Dollar and Yield mattered more. An FOMC is coming right up next week and then Midterms and I don't think pulling-forward the biased result of that Election is what this is about.

I suspect this is mostly about the Dollar; and a crowded short-side; and we'd even had a down-and-up squeeze of after-the-fact bears on big-cap techs. It is notable the biggest techs shook off the worst of the selling and we'll see if they have more pressure later.

The serious monstrous rally risks breaching the rising NDX pattern too and as so many were expecting it; you go the other way. One member pointed-out a convergence even in the DJIA recently (I'll share) and that makes a point. So many were convinced all the lines coming together meant a break; you get an opposite move (higher) instead of a plunge.

Dollar is a tailwind and probably becomes just a breeze soon; but it helped. If the Fed takes enthusiasm down a notch next week; so be it; but recognize it is all coming after a brutal September and possibly a selling climax this week in big techs; but too fast to confirm; and probably more testing needed later. 

My thinking was that we'd be stable and not to worry (in other words don't get too bearish) while I was away for a short cruise; and that has proven to be the case. I looked for stability or washout and bounces in the 'generals' and got it, so I'm pleased with the week's behavior. Next week with FOMC could actually spur more upside 'if' the Fed twists (or makes an error) suggesting a pivot; but we have no way of knowing if they'll actually do that. 

Enjoy your weekend as I try to recover; since this was fun but not relaxing; so I need a vacation from vacation so to speak... More upside to be attempted.

More By This Author:

Market Briefing For Thursday, Oct. 27
Market Briefing For Wednesday, Oct. 26
Market Briefing For Monday, Oct. 24