Inches from the 1842.25 correction target shown, the selling was very nearly maxed out at yesterday’s lows (see inset), technically speaking. The actual turn came from 1844.00, exactly 1.75 points above the bottom we might have projected, and although this might have been mildly expected, what surprised was the hysterical short-covering that drove the rally. Had this panic not occurred, the unthinkable would have resulted — i.e, a third consecutive down day on Wall Street. It was not to be, however, and now the only that remains is whether this will be the rally that propels the S&Ps to new record highs, or merely yet another failed tease. In the meantime, gratuitous 80-point swings such as we have seen in recent months will most surely be tradable.
