http://www.ritholtz.com/blog/2009/03/stock-markets-relief-rally-or-new-bull/The surge in prices again raises the question: was yesterday THE bottom? Before getting too far ahead of ourselves, Bespoke highlights the fact that yesterday’s gain was the eighth one-day gain of 5% or more since the S&P 500 peaked in October 2007. None of the previous occasions resulted in a sustained rally as shown by the graph below.
...Given the fact that the rally occurred against a level of extremely bearish sentiment and that the oversold market has probably started exhausting itself (at least in the short term with the S&P 500 having seen only three up-days over the 16 trading days prior to yesterday), a rally may be in bloom. Should we see higher prices over the next week or so, the more important question will be whether we are dealing with anything more than an oversold bounce.
There are a few indicators I will be monitoring closely as summarized below..."
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