Today's Market Brought To You By The Letters POMO

Today was a tale of two markets, both summarized by one word: in the morning, Ireland, and in the afternoon, POMO (here is a link explaining what a POMO is). Ireland has not only ceded soveriegnty, but has saddled their 4 million citizens with a boatload of debt, all in the name of saving more banks. And right here in the USA, where our leaders are much to responsible to monetize debt, that is exactly what they did today, sending the market into a humongous afternoon rally.the remarkable thing today is went down to the critical support level at 1073, held it, before rallying. The blue arrow marks the day IBD called a correction: so far that call has proven to have been correct, as we have gone virtually nowhere since then. This is day 8 of a rally attempt, and tomorrow could be a critical day, as the best follow through days come on days 4 though 9. We could get a break of either 1073 or 1200 tomorrow, and if we go to the upside today's volume should not be hard to beat.

If we were going just by the Nasdaq, the correction call would have been premature, as here we are up nicely off the bottom, but most of that move came in the first 3 days. This has cleared the midpoint of it's current range, and if we do get a follow through day it will likely be here.

the Dow industrials broke support briefly, and put a pin through the 50dma. The fly in the ointment here is the price relative line, which appears to have stopped dropping. We may be in for a longer correction than many think.

The Russell 2000 made a remarkable move today, is outperforming now by a wide margin, and is nearly ready to break out. Money has been rotating into here since late August and shows no signs of slowing down. Unfortunately, this is not one of the indexes that IBD uses to determine a follow through day, and without the big caps picking it up a little, this move might not last very long. However, if it does continue to lead, we could be in for a long uptrend.

Yet another sell off stopped dead in it's tracks by the Fed. How long can they keep this up? All I know i, not forever.

I will have the new highs update shortly.