The bulls finally came to play with some enthusiasm. Breadth was +62%. New highs were 183. New lows were stable at 47. Maybe we are on the way to 2800.
The futures dropped inside the channel this morning, but rallied strongly. That keeps the rally alive.
The green count crossed 50, but remains below overbought levels.
The bulls were willing to push prices higher with a bit of enthusiasm today. Even XLF participated in the excitement. It was up strongly during the early morning pullback in SPX. Maybe that strength helped spark more general buying. The VIX closed under 12 for the first time since the correction started. I don't know if a low VIX will cause buyers to pullback at some point or not. It looks like SPX should get to 2800. What happens there will be interesting. The bottom formation is very odd looking. There was quite a bit of selling across the base, but no final climax low. I don't know if the selling was truly exhausted or just waiting for higher prices. The sellers might show up again. I think we need to remain vigilant for now.
A friend sent this one in (tnx Manny). It is an extremely good explanation of what is going on in the economy. I highly recommend reading it so you understand why I have been saying the next recession will be very bad.
Hallmark of an Economic Ponzi Scheme
Saw this interesting stat today:
since 1970, the low in June has always been below (or equal to) the close in May. June started with two unfilled gap ups, on Friday and Monday. This implies that SPX is likely to fill those gaps during the next few weeks and trade down to at least 2705.
Bob
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