Stock Market -- Technical

The "Day of Atonement" rally half-facetiously anticipated in the
10/12 technical note came to pass right on time, putting an
exquisite but understandable squeeze on the bears just after the
market seemed to have broken down clearly. The Street simply
spent part of September accumulating stock to distribute it out
on the turn.

The market is clearly overbought short term and is slightly above
the top of the lengthy compression range in effect since June.
However, it did bounce convincingly up from long term support
(70 week M/A) and my internal supply/demand indicator shows an
overbought but sturdy advance.

The longer term price momentum indicators remain very anemic and
directionless and raise the question of whether the advance is but
a seasonal one that could meander into early January following a
correction at some point in the next week or two.

Key intermarket factors have been positive for stocks, notably a
rally in Treasuries and a weaker oil price. Reversals in these
sectors would probably undercut the enthusiasm for stocks.

For me, stronger readings on long term price momentum measures
are needed to warrant more than light exposure.