January’s rally was admirable.
It’s perseverance frustrated bears.
The infrequent single day declines maxed out at -0.6%.
And the last nine days of the month were more than mind-numbing for most traders as the market traded in a very tight range.
There’s no doubt the bears are ready. Almost every technical and sentiment measure I follow has pushed into a bearish state. Typically, I am ecstatic by the weight of the bearish measures, but it seems everyone is aware of the measures and have joined my camp. And when what seems like the herd is anticipating something it has a hard time coming to fruition.
We must remember that January is one of the strongest month of the year for the market. February not so strong with a historical return of 0.0%.
After three months of gains a decline seems the likely scenario. Again, almost all technical and sentiment measures have reached short to intermediate-term extremes, but will they win out for the bears or will the mighty power of the bulls push through the consolidation that has lasted nine long trading days?
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