The rally on heavy volume this morning after the opening in the es allows us to draw in the support line 860.25 and the resistance line at 873.75. The high is tested with a small upthrust 10:45 and then we move slowly down until 13:00, at which point we have a spring. Volume dries up in the ensuing small rally and in the bar ending 13:30 we have another more important spring with a close in the very upper part of the range on very high volume. A sharp rally immediately follows. Just as the slow response to the upthrust at 10:45 was probably bearish the immediate response to the spring at 13:30 is probably bullish, marking the possible end of the down move that began 1/6/09. We have possible ending action. Heavy volume propels the up move until 2:50 and there is a heavy volume sell off into the close. At this point the market was heavily supported(bar ending at 3:00) At no point today did we have evidence that demand dried up. In fact, the two up moves today around the opening and beginning at 13:30 have significant demand showing a marked change of behavior.
The SPY had large volume with a very small range indicating large support for the market. Gold, gold shares silver and South African shares are 4 of the top 8 ETF's. Perhaps gold will be the upside leader again. Gold shares remained particularly strong in this weak long decline, financials particularly weak, although C and JPM had reversal bars today, BAC did not and closed at its lows. On the other hand we have had very little accumulation at the bottom in the indexes.
Gold itself is in a spring position, and a close over 837(Feb) would be very bullish.
The euro again tested the creek it jumped as mentioned yesterday.
The DX pierced 84.98, its back-up high a few days ago but failed to close above it. This rally has troubles.
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