Rally
Powerful buying across the spectrum in the equity index complex continues to take us back to the weekly highs. If the market can maintain its current posture, there should be a continuing relief rally over the next couple of weeks.
As for today’s session, dealers have been buying everywhere, while locals have been the strongest sellers. From here, I don’t think there is much room for more — we are up 3500 or 2.6% on the session in the SPZ. I expect to take the afternoon off and watch how the market responds to this move. If we do not have selling this afternoon, it will move my interests to the buy side moving forward. However, if more selling comes in, I think it will leave a very choppy, sideways course of action.
I would not be suprised for some retracements toward the 1378 level today — but only a settlement below the open (1374) would put some questions of sustainability to the market. Remember, we have only been able to rally from lower lows since September — this will not be a easy habit to break.