The turn up in the 9 day moving average of this momentum model is a real plus. Although it needs a bit more follow through to confirm an intermediate term bottom, a move higher in the model such as today is a good start.
The S&P 500 cash index found support at the lower channel line as we talked about yesterday. The move today also enabled the stochastics to not cross at such a low level and remain in an upward trend.
Sentiment on all of the major surveys is right at and in some cases below the 2003 levels when the major low of the tech bubble was finally put into place.
Things seem to be coming together for an intermediate term rally, but the lows on Monday must remain intact.
The NASDAQ produced the most bullish pattern an index or a stock can generate.
The chart below will explain the pattern.
Look for the NASDAQ to lead if we have indeed put in an intermediate term low.
While there still needs to be more confirmation of a major low being put into place, the rally today was very constructive and broad.
I remain with my conservative 50% allocation to equities until we get more constructive confirmations of the low being solid.