The technicians would love this day. At first the S&P was up in the 825 range. Starting just after noon, the bears drove the market down, right down to the 50-day moving average of 793. And then, in the last hour, the S&P shot up to close at 813.88. Again, I'm not a technician, but sometimes, technical analysis can be very useful.
Holding and not falling below resistance remains bullish for the market. I'm looking for opportunities, but I'm not inclined to chase the run by buying here. I would need a clear upside catalyst to recommend jumping in after such a big run.
I think oil is vulnerable to profit-taking. The recent run-up has been driven by 1) the cut in supply by OPEC and other producers; and 2) the inflationary effects of the government banking plan (and other expansionary plans) announced Monday. Still, inventories are up and all indications are that demand remains weak.
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