Despite the damage today the market is not short term oversold so it has room to go lower but there is the 880-875 support zone close by. Bond yields spike today...not good bulls, not good. The 2003 comparison is no longer valid. This rally is looking more now like the post 911 rally. I did say originally that the rally reminded me of a combo of the post 911 and 2003 rally. That post 911 rally had quite a number of downside head fakes and before the market rolled over to make a new down leg plenty of bears were shaken out and too frustrated/burned to take advantage. We've definitely seen signs of that.
I am STILL seeing euphoric and very angry comments like "fuck you longs" from bears on the message boards who no doubt got burned shorting too early. Is such euphoria justified with the market only 5% off its highest point of this rally? If you check out the SPY board on yahoo finance you will see what I mean. Bearish posters dominate the message boards everywhere it seems. Therefore, don't be surprised to see yet another surge in the market some time in the near future to once again shake out and humble bears.
However, tomorrow is setting up to be another down day from the looks of it. What I really mean by this is that the bears have the window of opportunity here because the short-term trend is now down and the market is not ST oversold yet.
We'll see what tomorrow brings....
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