Today we finally got a rally that wasn’t squashed by sellers. The NASDAQ was up about 1.75% during the regular session and another 1% or so was tacked on in the after-hours session. Those late session gains are largely due to news out of Microsoft (+ 5.54% After Hours), Motorola (+ 5.78% AH) and Texas Instruments (+3.17% AH). But even before the after hours pops the market was showing some good signs of a bullish reversal. The NASDAQ and S&P 500 both completed morning star(ish) patterns today and there are a good number of other bullish candlesticks (hammers, bullish engulfing patterns) in individual stocks. Unfortunately for the bulls the prevailing trend on most of those charts is still down. So there’s still lots of overhead resistance to work through.
I was surprised to see that the potential inverse head & shoulders pattern that I pointed out on the NASDAQ the other day is still intact. It got real close to taking out the low of the head but it never quite got there.
There’s a similar, yet much healthier, pattern on the S&P 500:
So all of a sudden things are looking much better. The S&P is now back above its 200-day moving average and the QQQ is closing in on both its 50 and 200 DMAs. Tomorrow should be an interesting session.
