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24 March, 2021

By John Gray


“The [anticipated] corrective phase was ahead of schedule, since it started almost immediately after the publication of the Market Comment. Within 10 working days, the S&P 500 (SPX) lost 3.7% and the NASDAQ 6.8%. Then, soon after these declines, the markets perked up. The 10-day decline came so suddenly that the bears hardly had time to stir. It managed to bring our short-term Indicators to negative territory for a few days, but they just as quickly turned positive as did the Indices. During the decline there were no days when the Declining Issues had more than a 3-to-1 ratio of the Advancing Issues and it was the same for the Declining Volume vs. the Advancing ones. There was no “selling climax”.
Furthermore, while the SPX almost had the same low on 4-Mar as it was at the end of Jan, the VIX never reached the 37.5 level of the latter. Looking at other statistics, it became obvious that the majority of market participants used the decline for bargain-hunting. There was not a day that the number of stocks (excluding ETFs, etc.) that reached new highs was less than 100.
“So far so good” as they say, but let’s look ahead and see what this means for the rest of March. The 10-day decline may have satisfied the need for a March low, but according to other measures, the possibility of another dip later on in March still exists.“ (17-Mar-21)
Ron Meisels, Phases & Cycles, www.phases-cycles.com