January began with a sharp, waterfall decline in stock prices. The initial rally after the January 20 low was technically weak and quickly led to a resumed decline and a more-important bottom on February 11. Our Intermediate Term Strategic Indicator Composite of 16 "internal" (or equity-related) relationships and nine "external" (non-equity) markets has moved steadily higher since the January 20 low. Market internals have risen 1.2 sigma from -1.9 on 1/20 to -0.7 sigma. Cyclical sectors have driven the improvement, led by Consumer Cyclicals and Industrials.
Forex and stock traders are looking for the consistently wrong investor, trader and take the opposite position. This will obviously lead to winning trades for them. All traders have read trading books that point out that increasing volume is good for the continuation of the trend. Many new stock traders will try and fight the trend.
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