This double bottom has a chance, but a lot is riding on news out of Jackson Hole later this week from Fed Chair Bernanke about actions to stimulate the economy.
This technical breakout carries some risks with the S&P 500 up more than 4.6% in three days, but institutions are afraid of missing the market ahead of big news.
Look for a 200-point pop in the DJIA this morning. The Street is hedging bets that the Fed and administration will take action soon to reverse the slump.
The market is responding to news that the government won't shut down, and is also hoping for a euro-zone debt crisis solution. Lower prices for stocks is likely.
The market is close to resolving whether the consolidation pattern since early August is a base for a renewal of the bull market, or a further decline in stock prices and a very attractive buying opportunity.
Two Month Trading Range due for breakout, Heavy volume needed for big move up. Downside breakout could reach DJIA: 9,460 - 9,680 (S&P 500: 1020 - 1030)
Expect volatility today and tomorrow as futures and options positions are squared. Economic news was so-so, European news OK. Could be a 120-point plus day.
A resolution of the Euro-zone debt crisis stands to spark a big rally in global securities. US markets need help from the economic indicators, i.e. - no recession...
The big run in stocks has discounted a lot of what the President will propose next week and needs a rest. Sell off by Friday's close likely. New Buying Risky.
A double bottom here is a little "too pat." I think the market needsto do more work before a meaningful recovery. Drop below DJIA 10,000 still possible.
Stocks are cheap, there is a lot of cash on the sidelines. But a News-sparked breakout from this consolidation could be a fakeout leading to another plunge.
Without some good news out of Europe, early trading stands to produce a downside breakout in the market and in coming weeks DJIA 9,680 , S&P 500: 1012.
Market up at open thanks to Jobless Claims. Market can't afford more rally failures. Bulls must drive DJIA above 11,600 (S&P 500: 1220) to gain control.