US markets, on Monday, were seeming like a meltdown and if it closed like that – about 2.5-3 percent lower – the title would have been appropriate this morning, which is reversal.

So there was a big reversal in equity markets after very aggressive selloff moves that were seen. The US treasury yields also sold off, 7 basis points (bps) on the 5-year and 8 bps on the 10-year, which is at about 2.82 percent.

Brent crude oil prices were down about 4 percent at about $102.50 per barrel. The dollar has not pulled back significantly, it continues to remain bid, it still continues to be the place where people want to move into in times of risk aversion.

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There was a big comeback from the lowest point of the day and one has to wonder what happened. There is no real fundamental explanation. Prices moved, so they made technical impressions. For example, the S&P500 has made a bullish hammer, a price pattern where on a single day the market goes significantly lower than the opening level but then recovers fully to end at the open or higher than the open – within that same timeframe. It has also bounced off to 76.4 percent pullback level.

These are technicals, which are capturing the price action that the market is telling you, it is not explaining what has happened. It is possible the S&P500 gets to about 4350 or so based on the bounce that was seen last night.

Watch the accompanying video of CNBC-TV18's Prashant Nair for more details.

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First Published:Apr 26, 2022 8:59 AM IST