Today was a very strong rally. The market dropped a bit at the open as a result of the CPI news. But the Wells Fargo's news that it would increase its dividend helped to move the market a bit higher. Prices rallied into the 200 minute SMA a little after 10 AM. Prices fell back to the 50 minute SMA and then made a strong move through the 200 minute SMA. Prices continue to use the 10 minute SMA for support until 1PM, when prices retreated a touch. But they regained their momentum into the close, moving higher by a total of 2.74%.
Also helping out today were lower oil prices which I'll cover tomorrow. Also note the financial sector moved higher by 12% -- a huge rally for this area of the market. However, I'm guess this is a reaction rally, meaning prices moved higher not because things are great but because the index has dropped hard for so long; nothing goes down forever.
On the daily chart, note the following:
-- Prices rallied today to just short of the 10 day SMA.
BUT
-- Prices are still moving lower
-- All the SMAs are still moving lower
-- The shorter SMAs are still below the longer SMAs
-- Prices are still below the 200 day SMA, and
-- Prices are still below all the SMAs
In other words, one day does not a massive turnaround make.
