Accumulation at These Levels

We don't know about everyone else, but the last two days have been exhausting for us. Support testing has been ugly this time around. With the Fed Chairman killing the market on Monday and then Fed board members voicing their opinions in public yesterday, selling has been fierce and support levels have been put to serious tests. Nevertheless, indices and stocks alike are showing bullish money flow divergences when compared to last Tuesday's lows. This means that even as hard as this market has been to endure that smart money has been accumulating even as longs capitulate and give up their shares. We believe that despite what the Fed has been saying in public that the end of rate hikes is probably very near. They of course can't show their hands and some might say that they are even bluffing here so we endure huge amounts of volatility in the interim. Today we expect to see higher prices. In the morning however we could see more support testing; it will depend on whether sellers are exhausted or not. If sellers are out of resources then short covering will likely lead to a quick rally higher. If weakness from Asia bleeds over to the open though sellers might find continued reason to stand firm. Again, historically days like yesterday have proven to be buying opportunities. We believe that we will be able to look back next week and see that indeed, it was a great buying opportunity. Right now it is just exhausting though.