We had to wait a few days but finally we had a heck of a short term bounce, over 350 points led by the financials, of all things. But everything was strong with the exception of the metals with gold being off again. Our friends at Sentiment Trader posted this chart late yesterday. What it shows that on a historical basis we could be in for some positive moves over the next few weeks.
Of course all the talking heads led by Cramer who just 2 days ago was saying that after careful study he eas picking 5300 or some such as the bottom. Then last night he was enthusiastic about the rally that it was almost sickening. One area I do agee with him is that the SEC does need to reinstate the uptick rule and yesterday Barney Franks indicated that it could be done within a month. I agree that removing the rule was hurtful for the individual traders.
We do need to be careful here however. Looking at the charts, as you can see we have some gap resistance coming up at the 730-740 area. Plus we went from being oversold to over bought in 1 day on some of our indicators. So a gap up this am that stalls out in this resistance range, means we could see some pullback. So I’d be wary of chasing gaps until we see continued buying coming in.