Stock Market Rally off of Lows Led by Oversold Sectors

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Incredible rally off of the August lows, led by the groups that have been trailing for some time now, which could be first indication that the FED's non-inflationary actions are sustainable. We came in with a game plan to buy oversold stocks in sectors/groups that held longer term moving averages and crossed key reference points.

SPY One of the classic patterns I look for to support a rally that could be more than just a bounce in a bear phase is volume. That disappointed today. This does not mean that the close back over the 200 weekly cannot give us more upside, but like the last rally, the end was inevitable without volume patterns to support it. Nearly filled the gap left from 9/21's low -missed by 4 cents. 114.50 level now support to hold with overhead at 118.00.

DIA Was first index to hold Friday's high and run to new intraday highs plus could not fill the gap from 9/21 low at 110.88. Support 108. Resistance to bust through 111.00.

QQQ with early weakness in AAPL and AMZN took it's time but rallied later on to the resistance at the channel breakdown area and the 50 DMA. It eked out an Accumulation day in volume. Has its gap to fill at 55.38. If it closes back inside the channel, would not dismiss the possibility of the leaders back in control.

IWM Just about filled the gap missing by only a few cents. Also, closed back above the 200 weekly moving average.

ETFs:

GLD** Held the 160 EMA with oversold registering on the RSI both weekly and daily. Could rally back to 165, but the daily chart has strong indications that a double top was put in place on the second attempt at new highs.

SMH Back through 30.00 could get interesting. Otherwise, still in a bear phase with an anemic attempt at the 50 DMA.

IYR Did what it needed to do and now must cross 52.40 to stay firm.

IYT 77.90 is the 200 weekly moving average to cross.

XLF Good start on low volume. The real trend reversal is over 13.50. If it holds above 12.00 though, worth watching.

TLT Got long TBT and sold half with profit.

OIH Has more work to do since it still has a gap to 118, the August low to fill if we are looking at anything like a bottom. Otherwise, working off oversold conditions only.

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