So much for those 3 day weekend fears. Looks like all the weak hands sold on Friday and they are the same ones buying this big gap up. Money switching from weak hands to strong hands. You do that enough and the weak hands go extinct. The put/call ratios spiked on Friday to levels that we saw in the depths of the August panic. It usually signals a short term bottom. I will not go so far as say that it signals a long term bottom, because this market is more bearish than the dips you had in October 2014 and August/September 2015.
Still, crude oil is underperforming during these risk on gap ups, and it is routine now for crude to selloff as soon as the US crude pit opens (9:00 AM ET). I still lean bearish towards crude oil, and that will hang over like a dark cloud for equities.
We should selloff a bit from this gap up opening but find a bottom sometime in the morning trade and grind higher into the close. Not really an interesting level for either shorts or longs. If we get a rally today and tomorrow that takes the ES towards 1920-1930 area, I would be inclined to short it. Or a capitulation move lower down to 1840 would be buyable.
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