Good Friday morning. Over the last couple of weeks we’ve talked about the reasons for this short term liquidity-led shakeout, including yesterdays massive intraday reversal which began exactly as (fired) Fed Governor Lisa Cook was giving a speech where she warned extensively of a "sharp market reversal” (In no way do I believe this was a coincidence). However, what’s more important this morning is covering where we are and what comes next. 

The Fear & Greed Index hit “4” last night (last:7). This indicator is highly useful at extremes like this one. The lowest reading on record was “2”, on Christmas Eve 2018 (the Q4 from hell, brought to us by J Powell…which marked the lows) and another reading of “4” exactly at the 10/13/22 bear market lows. The current level equates to the fears of finding a monster beneath every bed. High probability contrarian indicator. The last time the S&P 500 was just 5% away from a record high, with extreme fear readings like this, the S&P 500 r...