1. Better volume as prices approach the highs of February. 2. A little relief from the very short term overbought condition-- e.g. Williams %R.
Once underway, this rally should be assumed to be countertrend until proven otherwise. That is, it's most likely to fail in the apparent topping range of 2007, where very heavy transaction volumes were seen.
FWIW. I never really know what the market will do but only what it's most likely to do given the technical environment. BTW, we are having some difficulty buying mainly investment grade stocks, only recently in abundant supply.
One can never rule out a different outome, but such resistance should at least reverse an interim bull trend and send the index down towards the January lows for a crucial test of the primary bear market now in effect.
Yes, I think that's probably the way it will play out.
Then, of course, you'll have the critical test downward around the January lows. Once below those levels, we could see quite a bear market.
But, meanwhile, the thing about the rally apparently beginning is the exceptionally oversold technical background: in some cases, selling climaxes for instance, these data were apparently unprecedented. So, what we see now are conditions that were exceptionally oversold AND widely recognized as such. (Why the huge numbers of selling climaxes were taking place.)
Curiously, the insider trend has greatly improved as well; so there may be somewhat of a disconnect between the perceptions of Wall St. and Main St. concerning the economic environment.