It is during periods of market volatility like this where we have to look to evidence over emotion.  There is so much confusion that every news item is significantly affecting the market intraday.  On 11/27,in “Identifying rally requirements” we highlighted two indicators that would suggest the end of the bottoming process.  The first was a reversal in the 10-week rate-of-change (ROC) in S&P 500, which happened at the end of last week.  The other indicator is a collapse in the 10-week ROC of the CBOE Volatility Index (VIX).  That requirement has clearly not been met, and the extremely volatile news backdrop is keeping volatility high.  Again, it is this environment where we turn to our “secret weapons” and look to the data. 


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All market data points are from Bloomberg as of 12/7/18 and should not be relied upon as current thereafter.

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