The stock market surrendered to the August lows and rallied on Friday

But, the huge bearish fundamentals facing us have not changed. The stock market fell below its bearish trend line on January 7, it was defined by the December 2 and December 17 highs.The price movement below its previous bearish trend channel was almost straight down. So, the market seems to be oversold. Breaking the August lows will, most likely, be preceded by a high well under the December 17 high. But, the odds of the stock market heading higher is very low. Since last January, the market tried and failed to move above its 1870 level thirty six times!

The Technical and Cyclical groups in my stock sector table show losses in almost every single sector that makes them up. Add huge losses in the Financial group, specifically the Banking Sector and the Financial Sector (e.g., brokerages). The only stocks that are rising are those that are most defensive. There is lots of money to be made shorting stocks.

Here is the chart of the S&P 500:

sp500

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