Stocks have bounced into the close on Friday, with both the cash S&P500 Index and its futures hitting their 200 day moving average and then turning sharply around higher.
We expect the 200 day moving average to hold as support next week and perhaps beyond, so look for stocks to rally, potentially quite strongly.
However we are seeing rapidly increasing signs of a significant liquidity issue beginning to grip the stock market. As this unfolds it will be bearish for stock prices, perhaps dramatically so.
If you have long positions if would be prudent liquidate them into the rally higher we are expecting over the next few weeks.