The result has been a sudden bounce in equities, with money chasing after the most shorted stocks.
This move forced a reversal in both the 'weighted average TEV extension' and the 'number of days to a short signal' indicators, even before these indicators reach oversold levels.
The maclellan indicator is still is a rather negative long term trend here, even though it seems to be flattening,
while the NHNL indicator does not show panic selling.
It is interesting to see the 10Y rates retreating hard since March 3, while the gap between the 10Y rate and the AAA bonds rate has sharply increased. This indicates a continued flight to safety.
As a consequence of these wide moves in bond yields, the $SPX is back to being overvalued here.
Conclusions:
I believe that even though banks are feeling the heat of mini bank runs, the Fed will continue to offer emergency loans while most importantly will continue increasing the 10Y rates next week.
The $SPX is still overvalued here especially knowing that rates are going to move higher next week.
On the other hand, the stocks below are under heavy accumulation. I sold March 17 DDOG puts early this week, but they will probably be worthless by the end of the day.
