The SPX is in short term advance mode, with a third rally attempt to build off the short term base
of a triple low of 1124 set during Aug. If it can rally up to and a bit through the 1225 level without
being clipped sharply by the bears, the rally could have some staying power. $SPX
The rally is currently lacking the kind of confirmation I would like to see. Specifically, I would
prefer that the 25 day m/a also turn up over the next 4-5 trading days, and that any extension of the
rally remain above the 25 day m/a as it progresses.
I issue these cautionary preferences because the market remains unstable as it rises or falls in
dramatic fashion relative to the news of the day. Experience also shows that it is unusual to
have rallies with good staying power so soon after the kind of strong downward move in price
level we saw over late Jul. / Aug. From a purely technical perspective, the major reason to be
suspicious the rally might fail is that it is an against-the-house bet at this point in time. Even so,
as Mrs. Loman said of husband Willy, "attention must be paid".
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