Mike's Mid Day Minute is available to members on Monday, Wednesday & Friday evenings, with one article per week available to non-members. Members please login and see "Mike's Mid Day Minute" in the navigation menu towards the top of the page.

Vicious SPX Rally: Recovery or New Upleg?


The derivatives of the SPX have been climbing since around 7 AM ET Thursday morning, after they retested Wednesday's lows.

The cash SPX hit its low at 1820.66 on Wednesday morning, and has climbed to an intraday Friday high (so far) at 1898.16, a gain of 77.50 points (+4.3%).

Thus far, the rally has recovered 39% of the Sept-Oct decline.

Let's notice that the SPX is bumping up against the down-sloping 200-Day EMA—violated on the way down on Monday-- now at 1899.60, which represents the first Litmus Test for the market.

A sustained climb above the 200-Day EMA-- especially on a Friday closing basis... no doubt will be an impressive two-day performance... but is it indicative of the start of a new upleg after a completed correction?

Purely from a technical perspective, only a climb in the SPX above 1930 will trigger signals that, in fact, a significant corrective low was established at 1820.66 within the larger, post-2009 bull run.

Conversely, inability of the SPX to make much, if any, additional upside progress within the 1900-1930 resistance zone, followed by a decline that breaks and sustains beneath 1876, will trigger preliminary signals that a vicious counter-trend recovery rally is complete within a developing bear phase.

  • Action-Oriented Trade Set-Ups in Stocks & ETFs
  • Macro Analysis of the Broader Markets
  • Detailed Technical Guidance for each Trading Idea
  • Live Interaction w/ Mike & Our Member Community
  • And Much, Much More!
Join Now! - Special Offer!
Veteran Wall Street analyst and financial author, Mike provides detailed and timely analysis and trade set-ups on a range of markets. Read more...

Have Mike's “Out Front” morning analysis delivered FREE to your email inbox twice weekly!