More green! Do not ask why!

So, we have a follow through attempt on the SPY (rally with higher volume)!

I put together a video on why I was not overly bearish into this consolidation / bear flag of the SPY.

https://1drv.ms/v/s!AsT65yHImWIXhKsGhZAt09cIAlxnMw?e=pAB31n

Why was it not a bear flag? Most important there was too much strength under the hood: Small cap value momentum was (is) strong, breath strong(er), 4 Weeks before earnings with bad sentiment, ADRs strong (Spain and other laggard Countries outperforming, Spain is almost never strong!), some higher beta industries strong (including Semis), TSLA, MSFT very weak and the SPY could still not cont. on the bear flag to the downside (bad news and the market does not tank = bullish).

IGs: I still have to do my analysis on the industry groups, but on first sight good things happened yesterday: Semis popped, if there is one industry that is the most important, then it is the Semis!

Earnings: 4 Weeks before earnings you have to ask the following question: is the sentiment bad? Yes, it is. If that is the case earnings put a bid under the market!

Breath:

Breath is stronger.

Once again, do not buy the SPY here, but it is save(er) to buy leading stocks in leading themes.

Also, I do not know where we will stand in 3 Months, but short term (1-2 Weeks) this action points to strength.

Know it is important how industry groups, breath etc. behaves if we hit 4000 on the SPY, if correlations are closer to 1 (e.g. industry groups loose steam) I would get cautious, if correlations are not closer to 1 (e.g. leading groups even stronger than SPY on resistance) the rally will cont.

Important: Do not ask why. There is absolutly no macro reason why we should rally here.

Follow price action and relative strength!

Have a great weekend!

Andreas