The market action today followed fairly well with what the probability model predicted, with a lower open to be followed by a late day rally and a neutral close.
It is also quite bullish that after a more than 300 point down day the previous session, the market was able to level off and not have downside follow through on the close.
The seasonal model calls for Tuesday to be a very good day on the upside and it is this exact type of day that the market desperately needs in order to keep the intermediate term trend from turning negative.
The Models Components are as follows:
Today was also in the time window for the change in trend date, so there is a very high probability that a low was put into place today.
The great thing about all of this is that if a strong Tuesday should come to pass, it will take the probability model into very bullish territory and we could finally see a breakout of this trading range we have been in for quite some time now.
No question that there are some real short term concerns here, but sentiment remains very bearish and the market remains in a very favorable time for higher stock prices.
Currently the long term allocation remains at 60% invested and this reflects some of the concerns I have for this market. However, as we continue to get favorable signs for higher stock prices, this allocation level will move up.