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Yesterday was a very strong day in the US markets and people were pretty welcoming with the big gains after last week's clobbering.  There were some  downside exhaustion signals as I've discussed combined with very low sentiment readings.  Some similarities with February's low and a lot of talk from strategists of "successful retest" and perhaps that's true but in my experience retests are scary moments where confidence is shattered.  Although sentiment and put call readings expressed that clearly, I didn't see any reports that expressed that fear.  Perhaps a failure of the "successful retest" will get the fear going?   Today's action hasn't followed through with much bullish action.  Opening on the highs and trading below is quite different from February's low.  I've been concerned with the downside exhaustion signals occurring within Wave 3 as this is only the mid point of the wave sequence.  

I am sending the new DeMark Indicator Primer tomorrow morning as I'm just finishing up.  It's the basics in simple terms and it will greatly help you understand how the red Sequential and pink Combo indicators work. There will also be thoughts on how I trade using the DeMark indicators as well the DeMark screens listed everyday on the Daily.   It will be posted on the Hedge Fund Telemetry site too.  

Support levels I'm watching - VWAP's from yesterday:  SPY 263.72, QQQ 162.88, IWM 152.27


Notable:

• US Markets - Sentiment bounce but lack of follow through after a strong day yesterday
  
• European Markets - More stabilization is needed
  
• US Financials - Risk to Regional Banks and XLF will be a big tell in a couple days
  
• Asian Markets - Strong bounce continued in Japan after downside 13
  
• Brazil -  Watch out for breaking recent support
  
• Crude and Natural Gas  Update - Liking Natural Gas (still) over Crude
  
• Gold Update - Just can't breakout while sentiment is back to extreme zone
  
• US Dollar - Sentiment stays relatively big while price is stuck in tight range now
  
• Bond Update - Sentiment is bid while 10 Year Futures are trying to turn up
  
• DeMark Screens - Another BIG reading for downside exhaustion signals on individual stocks.  This is mixed due to most occurring within Wave 3. 
  

SPX bullish sentiment jumped to 28% from 10% the previous day.  This is 2 points higher than last Thursday and I have to admit if it's down on today's reading I'll bet that 10% reading will be broken to the downside soon.
Here's a link to the Hedge Fund Telemetry market sentiment page with 40 charts of sentiment including equities, bonds, commodities, and commodities updated each day.   

Here's a chart of the SPX in Spring 2000 with percentage drops and gains.  It was even more extreme with the Nasdaq but the point is things can and likely will get more volatile. Nobody at the time could confidently say that was the top...  Stay nimble my friends...

SPY today opened on the high and has traded below while there is a new green Setup 9 that is unperfected.  Volume yesterday was less than the previous two days

Nasdaq bullish sentiment also jumped big to 29% from 10%

QQQ also has a Setup 9 today yet also trading below open and volume isn't that great.  Yesterday's volume was less than the previous two days as well

The Dow had a big point gain which is a whoop dee doo on CNBC.  The green Setup 9 was perfected

The Dow attribution yesterday was broad with no stand outs carrying more weight than others

IWM Russell 2000 did not close yesterday above the previous day's high and has reversed today

Euro Stoxx 600 did get the downside red Countdown 13 and bounced yet it's going to take some follow through for me to get constructive

DAX also up nicely today but trading below its open is not a great sign

Euro Bank Index bouncing today too and still has a 13 in its future

XLF did make a close under the February low close thus locking in wave 3.  There was also a green Setup 9 perfected like February so we need some follow through or else a new red Countdown will start to the downside in a few days.  I will be all over that when or if it happens

KRE Regional Banks now has a downside red Countdown (what I was saying could happen with XLF) on day 2 of 13.  This had been very strong and is only on wave 1 down

Japan Nikkei had a nice downside red Countdown strong bounce but I want to see what happens after tonight's action

DXJ Japan ETF is in wave 3 like the Nikkei and also bounced but I have reservations about this

FXI Hong Kong China ETF still looks weak with no downside exhaustion yet.  45.69 TDST is support

No bounce for EWZ with support at 43.48

Crude bullish sentiment is at 66% slightly ticking lower from 70%

Crude stalling here.  It did make a new closing high thus cancelling the down wave pattern.  It reverts back to Wave 5

Natural Gas bullish sentiment is at 61% and remains bid although the price doesn't trade well

Natural Gas Futures has another green Setup 9.  Setup's are excellent for defining ranges as you see.  I'd be a buyer here (I'm already long) and I am using a 2.50 closing low as a stop

Gold bullish sentiment is at 83% and it's back in the extreme zone.   

Gold Futures still can't seem to breakout.  I have no position at the moment.  

US Dollar bullish sentiment is at 37% down ticking from 44%.  

Despite the weak action there is an upside Wave 2 target of 91.86.  

Bond bullish sentiment is at 43% only down from 46% the previous day.  It's odd to me bonds remain bid despite the large equity move yesterday.  Perhaps a curious risk off mode is taking place with some large players

US 10 Year Futures had recent downside exhaustion signals and have struggled to get moving but it feels like they are trying

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