Today is a bearish reversal day, the daily charts of major indices look at least being topped out over the short term, which is quite bearish. However, tomorrow the market might bounce back up and close in green. Here are three reasons to support the potential rally:
- CPC is still lower (or equal to) 0.8 today. Therefore the market has 67% chances to close in green tomorrow according to 7.0.4 Extreme CPC Readings Watch.
- Statistically tomorrow is the most bullish day in March, and the probability of SPX closing in green is about 66%.
- 1.0.4 S&P 500 SPDRs (SPY 15 min). Oversold, very short-term, especially the ChiOsc is way too low, which also means that the market may bounce back up at least tomorrow morning.
On the other hand, bears should not be too worried if the market does go up tomorrow as the market is still very overbought in the short term. Therefore, if tomorrow high cannot go beyond today's high, maybe the short term reversal gets possibly confirmed, and bears should feel happy about this.
0.0.2 SPY Short-term Trading Signals. Especially NYADV is very overbought, which is my favorite.
Number of SPX stocks closed above MA10 (courtesy of www.sentimentrader.com), still is too high.
1.1.6 PowerShares QQQ Trust (QQQQ 15 min). QQQQ may have formed a Tripe Top. The target is $27.72 which is right at Fib 38.2.