Short-Covering Rallies and “Rumors of the Day”

Even though the Dow didn’t move triple digits yesterday, the rest of the market basically acted as if it did. The “afternoon rumor of the day” followed by the big move scene has two more days to go.

The market is now slightly oversold with the 2-period RSI of the Country Fund Universe at 31.45. The market is going to continue to move on any news about Europe (true or not) until something is finalized. Anyone trading/investing on anything fundamental is simply guessing right now. There are huge short positions waiting for the markets to drop. If the news is negative, they’ll win. If it’s remotely positive, the short rally will be substantial. Again though, for the next two days, it’s all about the rumors.

The above is from Larry Connors’ Daily Battle Plan.

To learn more about the Daily Battle Plan, click here for more information.

Larry Connors is founder of