After Today's Oversold Bounce, More Upside Ahead?

We finally had the very much anticipated oversold bounce today, although we closed well off the highs of the day. After the relentless pounding and negativity, it had to occur sooner or later, and, surprisingly, we even managed to do it with the financials struggling. Financials are still not acting that well, but General Electric (GE) come back from the edge of the abyss and that was enough to help the pent up buying pressure pick up some steam.

The question now is whether or not we have more upside from here. I think we do, but it should be choppy. The shorts have gotten complacent, the negativity too intense, and plenty of bulls are poorly positioned. I'll let others worry about whether or not this is the low for 2009. All I want to worry about right now is whether or not we might be able to move closer to key overhead levels. The primary level I'm watching is around 740-745 on the S&P 500, which was the prior annual lows until last week.

It always helps when we experiecne a sharp, v-shaped move. They are a very important step toward a healthier market. The bulls finally have the ball in their hands and have the opportunity to put some points on the board. They have tended to squander their advantages as is typical in a bear market, but they owe us at least one good bear market rally here pretty soon. Now seems like a pretty good time to deliver it and today was a good start.