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Wow, this is some rally today. As of this post, the DJIA is up 2.75%. Is it the beginning of something bigger where the gravy train is already leaving the station? As nice as it feels, I am hard pressed to say that now is the right time to jump into the tape after this type day. As you know by now, I try not to wing these thoughts.

1. The weekly readings did not approach levels preceding prior intermediate-term lows (I will highlight tomorrow).
2. All bear markets have violent countertrend rally days. As a matter of fact, the move into the July '02 low had 4 days of greater than 2% gains and the move into the Oct. '02 low had 2 days greater than 2% gains. The average spike was 2.93% (got most of that already) and the next day was down an average of 0.51%. In each case, the market was down sharply a small number of days after the spike day.
3. The percentage of oversold stocks using a 14-day stochastic in the OEX was 65% yesterday, well below prior low readings. The number was 54% for the NDX. Prior rallies were preceded by readings in the high 70's or 80's.
4. Traders are no longer lined up short as the market approaches the "pre-announcement" season, the conflict in Iraq, and tax season.

If you are buying today, you are saying that yesterday was THE low according to above point 2, because then obviously it wasn't down a few days later. As much as I would love to signal the all-clear sound from the intermediate-term standpoint, I can't. The fundamental backdrop has not improved, the intermediate-term technical landscape did not reach sufficient washed out readings and if anything, the geo-political environment has become even more uncertain.
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The tech gremlins are fixed - thank God and Wayne the IT guy.
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