Big Up Day In Market

One day does not a trend make. Again, the trend is your friend until the end when it bends. Did the market bend today? With the S&P500 up 3.7% you could make that case. The Dow had the biggest single-day point gain since July 2002. There was a bounce on the news the Fed will pump $200 billion into the financial markets through “term securities lending facility” (TSLF) as a way to combat the credit crunch . Hoping to ease the credit crisis, the Fed -- acting with the European Central Bank, the Bank of Canada and the Swiss National Bank -- agreed to loan investment banks money in exchange for debt, including slumping mortgage-backed securities. The market responded favorably.

There was a double bottom in the market with yesterdays low of 1272 and the low back in January as can be seen in the chart below. And we did get close to the projected low I made here.
However, I also look at a half day (4 hours) chart using the GMMA indicator. According to this model a buy signal occurs when the fast band of moving averages crosses above the slow band and the price comes back, on the first pull back, to find support on the slow band. We had such a signal not too long ago but if failed. In order to get a similar signal the market will have to rally significantly. My feeling is that the market is still headed lower but not much. There is a cycle bottom projected for March 22 or 23 according to a market timing model I am watching. We will just have to wait and see.