Around mid-day a good friend of mine called to inquire as to whether scenario "C" was still in play and how I was trading. At the time, I had a spiced-up pork loin on the grill, and I joked that if my lunch turned out delicious, I would buy stocks and if not, I would short. In this market, it's as good an indicator as anything.
As you can see, the PLI worked quite well... better, in fact, than traditional technical analysis. After we broke higher out of the basing pattern highlighted yesterday, price milled around a bit then failed. Only a half hour after the failure, price turned north again and ran 4% higher into the close. Recent action is really not giving us much to work with. The movements do feel, however, like the characteristic volatility that accompanies significant inflections, a point made by romeobravo in the comments section.
Volume increased once again with today's advance, a positive sign. We are now approaching the downtrend line again. Whether or not the SPX conquers the trend line presently is not as important as simply avoiding another large drop tomorrow.
So, we find ourselves once again at a point where the market can prove its mettle or turn and sink to new lows, and I believe the next big move will be the direction to follow.