Well there’s something you don’t see too often, at least as of late. And what’s that you may ask? How about Apple making strong moves in two consecutive sessions? Sweet! Was it Cisco’s CEO John Chambers talking up the future, was it the UBS Apple sort of upgrade, or was it the “hold the rates, we’re in a recession dummy” Fed speak? Don’t really know, perhaps all of that convoluted news, aided by oversold conditions and extreme negative sentiment. In any case we’ll gladly take an Apple advance of 3.55 (2.21%) to 164.19 any day.

Yesterday I was focused on the S&P 500, and the fact that it’s stuck in a channel and likely to move sideways. But today, it was the Nasdaq show. The good old Naz is in breakout mode, as it took out its 50-Day moving average with some gusto, then proceeded to take out a major gap resistance level at 2365. That’s two consecutive solid days by the Naz. The S&P did Ok as well, but it’s definitely a lagger. Today was all Naz Day!

So now that you’re feeling all giddy and prickly over the last couple of sessions, let me bring you down to Earth to smell the bitter reality. These moves won’t amount to squat in a Bear market without a backtest. They are important moves to be sure, they help build a base of support, moving the MACDs a little higher. But these last two sessions by themselves won’t lead the market higher and higher, especially since we are now very overbought on the 60 minute charts and getting overbought on the dailies. Yes, we may have a day or so left in this rally, but a pullback is in our near future. This pullback will add to the strength of the positive divergence on the weekly charts.

As I said earlier, the S&P had a good session as well, but it’s in the shadow of the Naz, unable to reach the 50-Day moving average looming above at 1302. Until we can get both the Naz and S&P above the 50-Day, it will be difficult to get a sustained move upwards in the overall markets, and thus AAPL. The Bears are well aware that giving up both 50s will embolden the Bulls, and induce the Bears to cover shorts, which the Bulls will gladly eat up. So this is the mission, take out 1302, hopefully in breakout style. Of course we can’t forget about the Dow. The trifecta, which would really put a stake in the Bears, is if the Dow can also break through its 50-Day which is currently within reach at 11720, and run along side the S&P in a joint venture to catch the Naz.

Oh, by the way, I had talked about Commodities rolling over the other day. And while it is true that they have taken a sound beating lately, it is also true that they are severely oversold. So that means we should expect a bounce from energy, particularly Oil, and some key Agi’s like POT and AGU. I don’t think the bounce will be especially big, and probably not worth chasing.

So in closing, I’m going to reiterate yesterday’s recap, and proclaim my overall positive outlook for the longer term, but extreme caution over the near term. The weekly charts point to a much stronger market, but the dailies and 60 minute charts say we need to test key support before we move higher.

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