The best thing about today was the higher volume buying, but the breakdown gaps established yesterday by the selling remain the same. However, markets have reversed in bulls favor in the short term but these gaps need to close soon if their bearish inference is not to be confirmed.
The S&P finished with a bearish engulfing pattern but On-Balance-Volume hasn't yet signaled a 'buy' despite the higher volume buying.
The Nasdaq also enjoyed a bullish 'engulfing' pattern but buying volume was well down on the S&P while the gain in the ROC wasn't enough to turn positive.
The Russell 2000 had the weaker finish of the indices and relative performance ticked lower as a result of the selling pressure.
For tomorrow, bulls will need to squeeze the bearish gap downs and negate the shift back to sellers. While this is still a relief rally, the more it can move away from the swing low the more wiggle room it will earn to withstand a concerted action by bears.
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