Is this the start of a year-end rally?  On 13 Nov 2008 the S&P tested its prior 10 Oct 839.80 low and rallied 11% from an intra-day 818.69 low to close at 911.29.  Volume was high too, with Dow volume of 476 mln being the highest volume printed since the 10 Oct volume of 674 mln.  This marks a potential change in direction and with divergences in place too (such as MACD and a lower high on the Vix), the stage is set for a rally in the indices.  Who knows how high we will go if this rally takes hold; lets just see what Mr Market gives us.  One hurdle is the 14 Oct 1,044 intra-day high…

Note that the FTSE had already posted a secondary low on 27 Oct and held well above its 10 Oct 3,874 low whilst the S&P was busy flushing out the weak longs yesterday.  Clearly this expectation of a rally will be wrong if the S&P closes below yesterday’s 818.69 low but for now the odds are in favour of a rally.