With major markets on the move, today King World News is featuring a piece from one of the greats in the business.  Also included are some key market notes from Doug Kass and the quote of the week.

By Jeffrey Saut, Chief Investment Strategist at Raymond James

"Looking at today's market action I am reminded of something you said to me years ago: 'As soon as you are convinced the market will turn left, it will turn right'." — Joseph Monaco, Ph.D., Monaco Capital

April 7 (King World News) – "It's pretty weird when you Google a phrase you wrote about and get back 3.8 million hits! It is also pretty weird when someone as smart as Joe Monaco spits back to you something you said to him years ago like, "As soon as you are convinced the market will turn left, it will turn right."

And "turn right" was what happened yesterday as the S&P 500 (SPX/2080.62) was poised to go down noticeably only to see the initial 100+ point Dow Dive reverse on comments by select Fed officials about "lower and longer" interest rates than previously expected given the recently softening economic statistics. Of course, this is no surprise since I have opined the model I use has been suggesting a November "rate ratchet," even though there is not a FOMC meeting that month.

Yesterday's rally took the SPX back into its 2080 – 2100 overhead resistance zone and just 4 points shy of its 30-day moving average at ~2084. Also of interest is that the NYSE McClellan Oscillator is about as overbought as it gets, save the selling "climax low" of October 15, 2014 where Andrew Adams and I did a special strategy call stating, "This is how trading bottoms are made."

Irrespective of yesterday's rally, we are sticking with the indicators that have served us so well over the last 16 years. They suggest there is a window of downside vulnerability over the next five weeks and that the stock market's internal energy has been used up.

Last year, the "Sell in May and go away" strategy didn't work, but as my friend Dougie Kass notes, it may work this year. Yesterday Doug noted, "The key concerns, in looking at the likely re-acceleration of second-quarter economic growth, is to what degree weather impacted the first-quarter slowdown (and what will be the carryover?); and, how will the stronger dollar and lower oil price adversely impact corporate profits and continuing economic growth?

Importantly, 2Q 2015 differs materially from 2Q 2014 (when both the economy and the markets rallied from the previous quarter) in that: 1) The Federal Reserve is infusing less liquidity today than a year ago; 2) The dollar has strengthened; 3) The price of oil has peaked; 4) Market leadership is narrowing; and 5) Parabolic moves (in biotech, bonds, DAX, etc. have halted)."

Moreover as Jason Goepfert writes, "Overall volume was low, but options traders showed a two-to-one preference for trading calls versus puts, something that has led to short-term plateaus over the past six months (see chart)." This morning the preopening futures are flat as the headlines read, "Euro zone business growth accelerates as new orders pour in" and "Stocks boosted by M&A pipeline and Fed outlook." ***ALSO JUST RELEASED: One Household Name Is So Worried About Market Bubbles That He Has Moved All His Assets Into Cash CLICK HERE.

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Eric King