http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=3&dy=0&id=p68821128571&a=214966864

It would not do to get overexcited about this power bar today, though it should be the end of the downwave.  It is a natural reaction to the 6 days of lower lows and a time honored market pattern.  Its significance will be determined next week.  But we are lifting most of our hedges as a short term bet.  We also closed our bet against the TLT.  In fact it is possible that nervous investors will pay the US government to return their capital to them, rather than giving them a return on capital.

As with all trends continuing (until they don’t) the trend of news and angst driven markets continues until traders fall over of exhaustion — or until the Hatfields and the McCoys settle their differeneces in the November election. Still we think there will be a rally coming in the not too distant future.  And in fact you can see in the chart above the present wave has a pattern of higher highs and higher lows.