Friday, January 2, 2009

The Rally Continues; Jan. 2, 2009

The rally continues to push higher, but on very light volume through the past few trading days. The key is what will happen when the big players re-enter the market sometime next week. 919 is a key level in the S&P and a strong break and close above that level should see the index headed charging for 950-1000. Unless the rally halts and sells off soon to relieve the dragging bearish divergence on all three momentum indicators (see chart above), then the more likely the reversal will be final and lead to new lows beneath 740.

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