Some said yesterday's 3% rally was a short-covering rally.  Some say it was an oversold rally.  But no matter what spin you put on it, it was a very good day.

What made it even better is that it was a follow-though to Tuesday's 1.5% rally.  Investors had a reason to sell Tuesday's strength, and certainly by late Wednesday there were gains to be taken, but the buying persisted. 

Technically, the steep downtrend was broken to the upside, although we are by no means in an uptrend.  The market did pause at the 200-day moving average, which may or may not be trouble.  The 20-day moving average is still below the 200 and 50-day moving averages so this could just be a rebound in a longer-term decline, but sentiment has been so low that there should be enough cash on the sidelines to continue to fuel this "bounce."


                                      Chart provided courtesy of www.decisionpoint.com

If this was a short covering rally, it could lead to more buying from that sideline cash.  No one wants to miss the rally so that cash should come in - in the next few days.  But again, we may not get a "V" bottom - or in the bigger picture, a "W" bottom - but rather a rally that eventually gives us one more scare.  And the reason I am suggesting this because of that 9-week cycle I wrote about yesterday (see lower half of page).  It still indicates that we may have a few more weeks before we bottom.

Friday is November 30th and for some reason, it is not very good historically.