Yesterday's fourth straight gain has probably caught bulls by surprise in as much as it has hurt bears. What I had thought would evolve into an Adam-and-Eve bottom may instead become a plain 'ol "V"-bottom. What this sequence of gains does is it generates lots of underlying support for buyers to step in on the next sell-off.
The S&P 500 was able to break declining resistance and close above its 20-day MA. Volume climbed to register accumulation, although overall volume was well down on earlier selling. Bulls would probably welcome some tight action near yesterday's highs to help digest these gains. Yesterday didn't give any indication of a bear attack on the 20-day MA.
The Semiconductor Index delivered on its bullish island reversal. Yesterday morning's gap shouldn't close, and with the day's finish above 200-day and 20-day MA it's well placed to run as far as the 50-day MA. This will help the NASDAQ and NASDAQ 100 too.
The NASDAQ breezed past 4,325 which had the potential to be an attack level for shorts. It also sliced the 20-day MA, leaving the 50-day MA as the next upside target.
The Russell 2000 has been more modest in its recovery, primarily because of the harder selling it experienced since the summer. It will probably be the first index to attempt a retest of the October swing low, but it's also the index with the deepest discount to highs and 200-day MA, but which enjoyed the best relative advance for the rally off October's low.
For today, it's probably going to be a sellers day - only because it's hard to see markets deliver another big gain. However, yesterday was a surprise, so let the market dictate terms.