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Being Bullish on the Market is Still Acceptable Given Positive Average Return Stats and Strong Support at 1300 — Tuesday, April 12 the SPYs gapped down 56bps.  I ran a basic study on how the market tends to react following a gap down day.  On days when the SPYs gapped down more than 50bps, the median next day return wass +11bps while the average wass +16bps.  The positive percentage changes suggests to me that we will get a small breather day on Wednesday as opposed to seeing the downward momentum carry over into the following day.

Meanwhile, the median next 5D change is +32bps so I remain short term bullish.  Despite the appearance of rolling over on the daily charts.  We do also have some decent support on the 23.6% Fib Retracement level on the SPYs at 130.40.  On the S&P futures, that retracement level is at 1300, also a good psychological level as well.  So overall, I’d say it’s okay to remain bullish on the market at this point.  I’m a believer in healthy pullbacks in a strong upward trending market.