If the market closed up today from last Friday's close, the small rally will continue for next few days and probably weeks, until mid January 2009.

For put buyers, short sellers, or bearish strategist, probably it is time to take all the profit and do not stay bearish for the time being. The rally could be strong and fast this time.

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hi sun,
market sentiments seemed to be low and there isnt much good news to propel the markets at this moment. unfortunately yesterday close was a down day and that again reinforces the overall weak confidence in people. many are just staying sidelines till a more pronounced up swing rally is in place.
just my thoughts. :)

rgds

Hi Tank,

Yes, the market did not go up yesterday, it means more downtrend today. As we observed, the market really tanked to a level no one could visualise in the morning. The market rallied back in the afternoon, and all eyes are watching whether the market could do a reversal today. If it does not, the upward swing will have to wait for a real market wizard to turn it around.

Thanks!

The other forward indicator, VIX (broad market volatility) went up to 79 only when the market went down sharply this morning. It did not reach 85 as it did when DOW dropped to 8000 points two weeks ago. VIX should be at least 90 if the market is extremely bearish at this point in the morning. This could be an indicator that the market is really seeing its bottom today.

Let's see whether VIX will lead the market up and away.

Thanks Sun for your VIX observations. Yes, it has been up and away for weeks now.