This morning he spoke about the “Thursday/Monday” syndrome, which sets the stage for a strong bull rally. On Thursday, the bears run wild on heavy volume, but the market recovers somewhat before the close, just like yesterday. Next, according to this historical pattern, the market on Friday is choppy, which certainly describes today. Then, there is no bullish news over the weekend. When the market opens on Monday, there is heavy selling all day, which is “capitulation” or that moment when all the retail investors have sold out, and the bottom is reached. On Tuesday, the market begins a long, sustained rally!
He compared the current market with other market turnarounds rather convincingly. I don’t know if the comparison is valid, but I sure hope it is!
I can foresee Monday will be bad, under any circumstances, but I cannot foresee a Tuesday rally unless there is some hope of resolution on the European crisis by then.