There are some good news and bad news.
Good news: we are off the near term downtrend. It makes it more like a bull flag which is positive.
Bad news: we are at the neck again and volume is still low on today's rally. The most annoying thing: we rally on weak $ again, same old old... It also happens on the last day of May.
As we notice before, when AAII bullish sentiment is less than 30%, a rally usually follow soon. This time is no different. According to previous experience, there should be more steam in this rally since MACD is just about to cross over (compare to March, market might have a little pause then charge higher again).
But I am only cautiously optimistic because economy data is pretty bad.
China PMI will come out tonight. If it shows much slower pace, then we shall see commodity to be sold off a little bit tomorrow.
After last few weeks sell off, you probably already know which is the best stock in each group. When rally comes, these stocks usually rebound the fastest (see AAPL today).
Buy the dip sell the rally works pretty well in this environment regardless asset class.
