The S&P 500 ran up 2% yesterday and it's been high fives for the bulls.  It closed near 1160 which is is directly below two resistance areas, the 200 day EMA and the old support line (now resistance).  A positive close today would be a very welcomed by us bulls.


                        Charts provided courtesy of www.decisionpoint.com

I've talked about this once before but I have noticed that the PMO, Price Momentum Oscillator in the middle of the chart, tends to give a stronger buy or sell signal on the second crossover, when the first crossover appears false.

When the blue line crosses above the green line it is a buy signal.  When the blue crosses below the green it is a sell signal.  You can see above that the second signal after the failed first signal would have paid good dividends to heed.  The first failed signal came earlier this month.  Now the PMO is heading up again and if it crosses above the green in the next few days, I think it is a solid buy signal.

I didn't need this signal to be a buyer as most of my other indicators gave buy signals about two weeks or so ago.  I sure wish I had waited but that's water under the bridge. 

If you look at the market bottoms I circled above, you can see that a quick change in direction is not the norm.  We usually see a few days of chopping around before heading up.  We may have had that already but I wouldn't get too nervous if we don't head straight up from here.  It would be nice, but it's not a deal breaker.  Most of the ducks are in a row now so I continue to remain very bullish, at least for the next few weeks. 

I know many of you are still understandably nervous about the market.  That's a good sign.  Remember, buy fear and sell euphoria.