Mind the Gaps

Mondays market action was clearly much better than at the end of last week.

Indices and sectors rallied into the gaps that were left when the market dropped Thursday. From here, follow through would be required to become more bullish however, no short or long term breadth indicators reversed back positive with Monday action.

Bullish percent measures have been turning down for weeks around the globe which clearly had little to do with the North Korea news last week. When the news hit, the market were already vulnerable to shock.

At the sector level, tech had the best bounce which makes sense given that it has been clear leadership during this bull market. Most sectors also attempted to fill the gaps left last week, with a few note able exceptions.

We will continue to watch for indication that recent weakness is resolving however for now, we remain invested with index hedges in place to mute market impact.

See below some key 15 minute charts.