Yesterday's rally was in response to an oversold condition: a daily buy countdown bar #9 and bullish divergence between price and the RSI. The question now is whether this move has any staying power. At this point I am willing to give the bulls the benefit of the doubt - if only for a few days. Oftentimes there is a 1-4 day window of bullishness after a completed buy countdown and price flip.
In today's session I will be watching to see if we get any follow through. If so, the first upside target is the short (red) moving average which will be at about 1297/8 today. If not, I want to see if the bulls can contain the damage by keeping the hourly RSI above the 38 mark.
Bottom Line: The allocation mix meter is at +50%. My near term scenario assumes that an intermediate term low is in and that a choppy rally has begun that will eventually take us back above the 1344 level. However; I remain quite concerned that the high may already be in for the rally from the 2009 low.
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