Check out the chart of the Dollar or DXY:
https://www.tradingview.com/symbols/TVC-DXY/
Over at least the past several weeks the SPX and DXY have been tightly correlated.
Every move up in the DXY has been mirrored by a downward move in the SPX.
Likewise, every move down in the DXY has been mirrored by an upward move in the SPX.
That said, here's an (Imo) interesting article at Zerohedge about a plan presented to the ECB (European Central Bank) last week to curb inflation that (according to the author of the article) might be connected to today's reversal.
Stocks Erase CPI Losses After ECB Headlines:
https://www.zerohedge.com/markets/st...-ecb-headlines
That said, my gut says the reversal is probably the result of the market getting a little too oversold in the short term.
Also check out a chart of the VIX which failed to make a fresh high yesterday, and is down big-time today right now as I type this.
Then check out a chart of the S&P 500 and the VIX together.
For a really high percentage of the most recent short term S&P 500 downward cycles:
Once the VIX closes over 30, it has continually closed at a new high each trading day during each short term downward cycle.
But as soon as the VIX failed to make a new high:
That's been a pretty accurate signal the market is about to reach a short term bottom (almost always within a few trading days.)
Fyi, the VIX failed to make a fresh high yesterday.
I realize hindsight is 20/20... but here we are.
-jp
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