Shahar, been looking over the charts, this move down had a tremendous amount of momentum going for it, the SPX made a new low in rsi, so no bullish divergence, if you subscribe to the theory that momentum precedes price, if a rally does develop from this oversold area or just some consolidation, we should at least see a retest or a new low.
The McCllelan Oscillator never makes V spikes up from oversold territory like this, there is usually a false rally, a retest(s) with a higher highs then a buy spike.
decisionpoint.com
This chart shows there was more worry around the bottom on 5/26 than now.
Just mindless conjecture, but I also think a lot of people expected a rally to 12,000 during earning season and were going to sell into the rally to be out for y2k, this abrupt reversal on good news fooled (trapped) a bunch of prospective sellers, who may have been looking for a rally to exit, and may be still waiting -ggg-
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