Summary
The stock market continues to bounce around like a rubber ball in a small room. Despite large gains in the major indices on Wednesday, they are all still in a downtrend as price has traced out a tight downward-sloping channel of lower highs and lower lows. In addition, the five-day/13-day exponential moving average (EMA) crossovers for the mega-cap indices remain on sell signals, while the daily Vortex indicator and the 21-day rate-of-change (ROC) also still flash sell. Meanwhile, the 14-day relative strength index (RSI) readings for the big three have broken downtrends, a potentially positive sign, while market breadth was strong yesterday. The S&P 500 (SPX) popped 1.8% on Wednesday and stalled at its flattish 50-day average. The top of the bearish channel looking out until Friday is at 5,975 — and a break of that area might signal the end of the pullback and a march to new all-time highs. The Nasdaq 100 (QQQ, 516.48) jumped 2.3% and is back over its 50-day, while the top of the bear channel is near 521 extending to the end of the week. The Nasdaq popped by 2.5%, the S&P 100 climbed 2.1%, the S&P MidCap 400 rose 1.3%, and the S&P SmallCap 600 was up 1.6%. Bonds rallied nicely after the better-than
