Strong Oversold Rally

By Lawrence G. McMillan

These oversold rallies are unbelievably strong – especially this one, which was preceded by three of four days in the “90% down day” category.  Yesterday afternoon’s 45-point $SPX rally in 45 points was perhaps unprecedented, and now another 20 points have been tacked on today, as another afternoon rally is gathering strength.  Makes one wonder who was selling previously, and where are they now?

The $SPX violation of the 1120 and then 1100 levels was significant, but now we have sliced right back up through them with nary a pause of resistance.  There was previous resistance at 1140, and that is today’s high (so far), so perhaps that will provide some resistance again on this move.  By the way, this is not going to be a “90% up day,” but lately the rallies – while broad, when they occur – have not been able to register that 90% category...

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