Stocks closed sharply higher on Friday. They were still down for the week. But Thursday's end-of-day rally from the lows, and Friday's surge higher, was very bullish, not to mention, extremely impressive.

As I wrote after Thursday's close, the sell-off in the S&P on that day, was not like the other panic-induced plunges. Instead, it seemed to go down in a slow and measured way. And as their correction got closer to the -20% mark, it almost seemed like it was ticking down ever so gingerly. Almost like the index didn't want to break that threshold.

From their highest close to Thursday's intraday low, the S&P was down by -19.55%. Even if you measure the decline from its all-time high, rather than its all-time high close, the S&P still never broke -20%, as it 'only' got as low as -19.92%.

And then, within the last 15 minutes of trading, the S&P came off their lows, which was down as much as -1.94% intraday, to finish down by only -0.13%.

Friday picked up right where it left off, opening higher and building on those gains. By the close, the S&P was up 2.39%.

After coming as close as you could to -20% (bear market territory), the S&P promptly turned around and staged a comeback.

The market still has lots of work to do. The S&P remains in correction territory as they are still down by -16.1%. The Dow is also in correction territory with a decline of -12.5%. The Nasdaq fell into bear market territory in March (even though the other indexes never did), with a decline of -26.5%.

So was Thursday's low the bottom? At least for the short-term? Or was it the bottom, period? Or was it just a head fake before we crash even lower?

Only time will tell.

But after 13 down weeks this year (with the last 6 weeks all being down as well), and only 6 up weeks this year, the market is due for some more positive price action.

Granted, we're still going to be dealing with inflation. In fact, it's likely to stay elevated for quite some time. But last week's CPI and PPI reports, while still showing inflation at roughly 40-year highs, did tick down from the previous month. And that's a step in the right direction.

And the debate on whether the Fed will overcorrect on raising rates and send us into a recession will continue as well. But I don't see a recession. The labor market remains strong with the unemployment rate at near 50-year lows. And with millions more jobs available than there are unemployed people to fill them, it's likely to stay strong for the foreseeable future.

Moreover, the consumer is strong and businesses are strong with consumer spending up 2.7% q/q (which was a faster growth rate than the previous quarter's 2.5%), and business investment is up 9.2%. In addition, residential investment was up 2.1% q/q, and final sales to private domestic purchasers were up 3.7% (vs. the previous quarter's 2.6%).

Let's also not forget that the recent sell-off has lowered stock valuations to levels we haven't seen in over 2 years (April 2020).

Let's see what the week brings.

But there's plenty of reason to be hopeful about the market. Even downright bullish again.

See you tomorrow,