I would guess this one will stick

I'm talking about a bounce in the market. Why do I think it will stick?

After hours TXI lowered guidance-not good news

The BOE kept rates at .50% despite CPI running more then 2x the target rate of 2% (CPI at 4.5%)-signs that our Tea and Crumpet friends are more worried about the fragile economy then runaway inflation.

From yesterday's Beige Book, "added to the view that the economy is experiencing a temporary slowing."
Yet today we hear rumblings from the Obama administration:


 "President Barack Obama’s advisers have discussed seeking a temporary cut in the payroll taxes businesses pay on wages amid economic reports suggesting the recovery is slowing, according to people familiar with the matter."

Obviously if they are thinking about cutting taxes-and Democrats nonetheless, the temporary slowing may not be viewed as so temporary after all. As I said yesterday, all the manufacturing data series suggest the trajectory is toward contraction under 50-that's more then softening.

And Initial claims at consensus of a 419k print  came in at 427k. The previous print of 422k was revised higher to 426k.

It kind of sounds like I'm making a case for why the market shouldn't rally and in a way I am, but as we know, Wall Street sets up these cycles of ups and downs long in advance, damn the economic data, thy've got an investment on a bounce that needs to pay off.

Take a look at the longer term SPY 3C charts

 The 60 min chart is in a relative positive divergence-starting around the $131 level or so.

 Here's yesterday's intraday trade, accumulation in the triangle and then a.... Well as of now, an apparent false break down, one of the best timing signals we have seen lately.

 Here it is on a daily chart. Remember in last night's UUP update, I said a strong zone of support, which is obvious to all, is usually broken on a false break down before a reversal. You don't get much stronger support then an exact tweezers bottom, broken yesterday.

 The 30 min 3C chart, also in a relative positive divergence

And the 15 min chart, again positive and looks like it started around $131, so we can assume an average accumulated price of about $130 or so.

Lets see!