Market Comment 05 26 10

We are finally getting the expected bounce off of the market lows.  The market was extremely oversold and due for this bounce. Below is yesterday's chart of the S&P500. There are some interesting observations:

   1.   Support held a around the 1140 area. Support was determined and established from the Nov 09 low of 1145 and the Feb low of 1144.

   2.  We got a bullish candlestick formation called a hammer. A hammer suggests a potential short term reversal.

(Click on chart to enlarge it for easier viewing)

(Click on chart to enlarge it for easier viewing)

A caveat, one day does not make a trend. An uptrend is defined as a series of higher highs and higher lows. Risk remains elevated so quickly jumping back into shark infested waters is not prudent.

*Added After Market Close:

The market closed to the downside after attempting a morning rally. The danger signs in the market persist.