Is it running too fast?Yes AGE remained flat to finish on 5.6c....

Is it running too fast?

Yes AGE remained flat to finish on 5.6c. Our volume was average, just over 20m shares traded.

ASX U stocks were in slight decline. Of the 25 stocks that I track, average decline was 1%.

Overnight US U stocks made steady gains with average gains of over 4%. Its a pity ASX U stocks, once again, did not follow that. The U Futures gained 5c to finish on $49.25

What next -

Yesterday US indices were on a wild ride. Right from the opening the indices went on a trot with average gains of close 3% gains. ASX followed, though not as strong, with gains of around 1.75%. in US the resource stocks that I follow made average gains over 4%. But ASX punters were not buying that. After a short good start, all day it was playing defensive as if the indices are in good red.

So US indices have surprised everybody, including me. In 2 days gains of nearly 6% on indices. Sometimes it struggles to do that in a month, let alone in a week - here its done on two days. So what is running it - technical or fundamentals? I think its both. Technicals it was way oversold. 10 year yield decline and PMI figures gave boost from fundamentals. There is a high likelihood a short squeeze has intensified the gains.

SP 500 is now sitting at 3790. There are 3 resistance above at 3820, 3850 and 3885. I was expecting a rise of 8% before a good test around 3850 to 3885 level. But i expected this in close to 2 weeks. Indices have already risen 6% in 2 days. So the real test is within only 1 to 2% and lot of time is still left.

There are 2 theories going around. Similar to March and May when we had two big days, there was a drop the next day but another bounce happened after the drop, going above the previous. The bigger fall then came later. Other theory is that we are in a different situation now and the test of 3850 to 3885 will happen first before any drops. Its very unpredictable, so both have equal chances,

Personally - I was tempted to take some off the table after seeing such big rise in SP 500 yesterday which made things somewhat uncertain. At this stage I want to see whether 3850 to 3885 is to be tested, and what is the result. That will provide me direction and am staying put for now.

So what will happen tonight? US Futures in medium red. Asian markets mostly green. Volatility index VIX below 30 at 29 - we want it under 24 to start with. Cryptos are not panicking - Bitcoin above 20k. Important data around non-farm payroll on Friday - still 2 trading sessions before that. Will technicals drive the market or a real fight between bears and bulls? There have only be very few occasions in last 50 years that SP 500 has made of gains over 2% in three days a row, with the last time 20 years back. Will that happen? Lets hope so. All the best.