Here are some notes/thoughts on the recent price action:

1) On Tuesday 3/29, the Nasdaq Composite had another day of follow through-type action, as it was up +1.84% on higher volume than the previous day AND on higher-than-average volume. This follows up the Day 4 FTD on 3/18 and the Day 8 FTD on 3/24. Bottom line, the market is showing consistent signs of the big institutions coming back in, and the price action is very resilient.

2) During the Weekend Video on 3/12, I discussed to start thinking about a quarter-end rally, as we sometimes see mean reversion buying towards the end of weak quarters. I followed up during the Monday Webinar on 3/14 and mentioned that I bought the SPY at 416 as a way to play this (and yes, I sold too early, lol). While I certainly did not expect such an immediate and powerful rally, the recent strength bodes well for the next 6 to 12 months. The breadth thrust we had on 3/15 through 3/18 (four straight S&P 500 gains of +1.0% or more) has happened only four other times since 1970. The market was up every time a year later and the average gain was +28%. In addition, the S&P 500 just had an 11-day rally of greater than 10%. Over the past 40 years when this occurred, the markets were also higher a year later.

3) This is where knowing your timeframe is very important. Over the near-term, I wouldn’t be surprised to see some consolidation and “backing and filling.” This will give time for stocks to build proper handles. I’m very pleased that the four stocks I highlighted last weekend have worked out well so far. As more stocks set up, I will continue to present them during the videos and email you in between videos if I see anything that stands out.

4) A few members emailed me about the pullback in Energy over the past two days. I view it as normal because many stocks in the sector (and in commodities in general) were extended after their strong run last week. As I always say, don’t chase things when they are extended. The XLE and OIH (as well as many individual energy stocks such as APA, FANG, DVN) had normal pullbacks to their 21-day EMA so far this week. Again, make sure to get strong entries on any of your positions to help deal with normal pullbacks.

I will discuss all these points further in the MidWeek Video on Wednesday. Good luck for the remainder of the week!