Slow Shift In Sentiment

Twice this week the market has experienced a violent selloff in the final 15 minutes of trading. Both times the market has gapped higher on the next open (Qs are trading at 32.81 pre-market). For the participants who threw their stocks away in fear of a continued meltdown, they have these choices; sit on the sidelines watching in disbelief, to short the open the next day or to chase prices higher. With a slowly improving market (evidenced by the closes above the rising 5DMA) selling short doesn’t make sense to me, neither does chasing opening prices. The supply which was released to the market in the late day selloff is less supply going forward (which allows prices to move higher with more ease) and those who sold short actually increase demand as they scramble to limit losses with a gap opening. So what may be best is to wait for a slight pullback and then to look for this market to continue higher. We remain in a treacherous environment, but the sentiment seems to be slowly be turning and more importantly, prices appear to be turning, for now.

What does not kill me, makes me stronger.
Friedrich Nietzsche