From the desk of Steve Strazza @Sstrazza
In January and February, we cautioned that we wanted to be selling stocks, raising cash and buying bonds due to bearish divergences and deteriorating market internals. At the same time, many major indexes and sectors had achieved our upside objectives and were at logical levels of potential resistance.
The Global Equity Market collapsed and the S&P 500 fell 35% soon after, blowing a hole in the long-term uptrend in most major indexes around the world.
In late March we wrote about bullish breadth divergences and the key levels of interest that made us want to err on the long-side over the near-term.
That ended up being the tradeable low we were looking for as stocks gained 30% and retraced more than half of their recent drawdown in just 15 days.