Market is looking ready to continue its bear rally

Despite my pessimism, I think this bear rally may have steam to go even farther up in this run before the final flush down. Here're my reasons.

​1. We have touched the 38% Fibonacci retracement level precisely last week and have been making higher lows. See Figure 1.

​2. As I noted in the morning, the up days have noticeably more volumes than the down days in this rally.

​3. My two favourite shorts, GE and GS, are resisting to stay below their supports. In particular, Figure 2 shows that even in today's swinging moves, they closed above their intra-day supports at noon while the S&P 500 broke its intraday support at noon, just barely. In fact, today's move look a lot like TCK when it retraced (and when I unloaded), just to punch through to much higher later. If that's any indication, these two (and the market) will be breaking their long term resistances within days.

[caption id="attachment_1176" align="alignright" width="500" caption="S&P 500"]S&P 500[/caption]

[caption id="attachment_1177" align="alignright" width="500" caption="GE, GS, S&P 500"]GE, GS, S&P 500[/caption]