The Bull Is Back! Updated End Of Day Thursday

Update To The Original Post From Wednesday: I replaced the above chart with one reflecting the pricing action on Thursday. The market was turned back right at the next Fibonacci level around 1410 as expected. Much of technical analysis is gibberish but Fibonacci levels are watched very closely by professional traders. Hence they tend to have a self-fulfilling effect. Tomorrow's action is very important for the bulls. Another failure at 1410 will likely result in another down draft.
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Well.....

Yesterday was a purely technical rally. In other words, it has absolutely nothing to do with the intermediate term market trend. At least not yet. We reached multiple market conditions that brought a wide range of buyers into the market, be it cash or futures. I wouldn't say the probability of a strong reflex was 100% but there aren't many better set ups than we had today for very short term traders or any type of trader able and willing to play a short term technical condition.

On the chart above is the S&P cash index, SPX. The SPX was rallying off of the 38% Fibonacci retracement level. This is typically a very strong level of short term support in most market moves. The 23% retracement right above has tremendous congestion and will likely provide formidable resistance for any attempted follow through. If we make through 1410 before we see another move down, I'd be rather surprised. I'm not really focused on the very short term, but I thought I'd throw down the gauntlet and give Mr. Market a chance to humiliate me.

What is worrisome is the general apathy on Wall Street. The "We need a correction and this is a buying opportunity" crowd seems to be in the majority.