From my view, and previous comments, the oversold markets needed to be squeezed as too many investors were on one side of the boat.

The news backdrop hasn’t changed at all. Earnings and weakening economic data continue to meet lowered expectations.

Citigroup (C) stated Friday that long crude oil (and I assume energy stocks) was their investment of the year. Now who would fade that call? The bank was one of the arsonists to light the bulls’ oversold market attack.

Goldman Sachs (GS) earnings were much weaker than expected. Economic data this week continues to decline. Sure we had a bounce in PMI Manufacturing Index but the employment component remained negative; Existing Home Sales from December also experienced a large increase, but that was against a much weaker November report so it was a wash; the Oil Rig Count fell once again and Leading Indicators fell once again.

It doesn’t take much to stampede the herd as most bulls are waiting for more QE from the Fed, more central bank manipulation from the ECB, PBOC and BOJ. The thinking now is why get in their way.

My current thinking is the S&P 500 could rally 5-7% from Wednesday’s lows taking the index to between 1902 & 1956. Then we’ll see where things go. In the meantime, let the bulls have their way before trying to short.

Meanwhile from Davos the powers that be are concerned their input and control of markets and politicians was in danger.

They’re all much worried about renegade populists like Trump and Sanders eroding their overwhelming influence.

One kingpin with a tin ear was Blackstone’s billionaire CEO Steve Schwartzman who was stunned to learn us commoners were pissed-off saying: “I find the whole thing astonishing and what’s remarkable is the amount of anger whether it’s on the Republican side or the Democratic side. Bernie Sanders, to me, is almost more stunning than some of what’s going on in the Republican side. How is this happening, why is that happening?” Easy for him to say from his perch high above us commoners.