You can only expand the market yet

After another day of punishing the rotational move that major indexes were hiding, pressure finally rose this afternoon and allowed many hard-hit stocks to bounce back. A good example is biotechnology.

XBI Biotechnology Exchange Traded Fund (XBI)XBI) is down over 3% on the day, but manages to close near flat. The breadth remains negative at 3300 winners to 4,860 losers, but is far from early lows. Cryptocurrency action was better, and cannabis stocks rebounded as well.

It is possible that some afternoon buyers are anticipating the positive seasonality that occurs the day before Thanksgiving. Over the past 61 years, the S&P 500 has risen 70% of the time against Turkey Day, and it has done pretty well about half of the next trading day.

I’ve been grumbling a bit about the devastation under the surface of this market, but when things get that stretchy it tends to produce a pretty good snapback. We had a bit of that this afternoon, but conditions are good to continue tomorrow when traders are in a holiday mood.

This has been a very tough market lately, and it’s easy to get frustrated when you suddenly retract a significant portion of your gains. The best way to deal with it is to keep yelling.

I wish you a good evening. see you tomorrow.

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