First, note that equity prices broke through a key downward sloping trendline yesterday.
Note the sharp, early morning sell-off (a) followed by a strong rally (b). After the MACD (d) printed same height peaks (a bit before (a) on the chart), a reversal was likely. Prices broke the uptrend and then moved sideways for the rest of the day.
On the SPYs daily chart, notice that prices are still printing small bars on decreasing volume, indicating the intensity of trade has slowed. This is to be expected considering we're going into the end of the year holidays.
Also note the IWMs are rallying, indicating that risk based capital is still moving into the market.
Yesterday the Treasury market also revered several days of declines.
In the afternoon, notice the three different trend lines whose angle increases. This indicates the momentum behind the rally was gaining steam as the trading day progressed.
