As expected, last week's Indicators improved on their oversold extremes, but enough serious damage was done previously to warrant a cautious outlook for now. With the averages still below their 200-day MAs and horizontal support lines such as the SPX's 1163 ravaged, today's rally could be a short-covering corrective rally, rather than a new Bull market with Summer coming on.
The McClellan Oscillator rallied back from -55 to the zero line, but the Summation depth of -437 is well above a -1000 oversold level. Market letters have snapped back to semi-complacency but the Nova/Ursa ratio has slipped into the high teens - a reliable Bullish sign. Another positive sign is the Bullish per cent having worked its way down to 53.
With today's (Monday) large gains slipping away in the final hour, I would adopt a "Show Me" stance until Volume and Trend improve.
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