SPX tested below Monday's low a few times this morning, but failed to break down. That emboldened some buyers and some short covering. The volume was pretty low. That indicates the sellers were largely absent. For such a big day it would have been better to have a lot of volume. Not to be in this holiday week. Breadth was strong at +85%. New highs were 5. New lows fell way off to 779.
The futures rebounded all the way to the 20 SMA. It is hard to believe how stretched they were.
The red count has come down out of oversold territory.
Big days like today get some bulls all excited, but the fact is they happen in downtrends and do not always mean a bottom is in the making. There is still plenty of room on the upside if the bulls are willing. I have no idea how long this bounce might last. Hopefully there will be upside follow through, but there is no guarantee. There have been plenty of one day wonders like this before. I think it is safe to say we should expect more volatility.
Bob
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