The market opened higher and then followed-through. At the opening I thought the news from UBS and Citigroup would sink the market. However, Citigroup recommended the homebuilders today, attempting to call a bottom in the group. The slower manufacturing growth in the ISM report gave traders hope of a further rate cut.
The daily SPY chart shows some good movement. First, notice the index has traded off of the 10-day SMA 4 times since the market hit bottom. This is called a "bump and run" pattern" because the price continues to move up and bumps into a particular trend indicator for support. In addition, last week's small candles have now become a base for further upside movement.
That's what I was referring to at the beginning of this update when I said "What a difference a weekend makes." Last week's bearish candles looked like a topping pattern at the end of the week. Now they're a base for further upside movement.
The QQQQs continue to move upward. The trend is firmly in place.
