SPX had a very strong day yesterday and closed slightly over the 200 DMA. There has been a remarkable change in sentiment and the intractable problems of last week all seem to be relatively small bumps in the road ahead this week. Have we really seen a major low that will trigger a big new bull run? Possibly, but I'll need to see some more evidence first.
I'll lead with the ES chart today, as that expresses best the main two technical paths for today. On the bear view, with this being a strong oversold bounce in a downtrend, the obvious upside target is rough declining channel resistance in the 1405-10 area. The overnight action looks like a bull flag so we could see a move directly to that channel resistance, with the big caveat that there is very strong resistance in the 1386-8 area.
