By Lawrence G. McMillan
Buyers finally emerged yesterday afternoon and they have continued into today. In my mind, the complete impetus for this rally was the severe oversold condition that had emerged over the previous three days of heavy selling. Today’s rally is on track to being a “90% up day” – certainly in terms of “stocks only” data and potentially in terms of NYSE-based data as well. At the current time, on the NYSE, advancing volume is 12-to-1 over declining volume. As we all know by now, a “90% day” in one direction normally spawns an opposite “90% day” in quick order. With that in mind, we don’t want to get too bullish, but it’s certainly possible that the momentum that started yesterday could carry $SPX to the highs of the trading channel that we pointed out yesterday. That would be 1240, roughly. $SPX is at 1192 at this moment, so there’s a little more upside room. And, while it’s not pertinent right at this moment, don’t forget that a downside violation of that channel would be very bearish – activating targets for $SPX 1000...
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