A +300 reading on the MCO occurring on a rise from a less severe correction would be extremely bullish, indicating that market breadth had rapidly become positive. Unfortunately this is not the case we are seeing today and the positive momentum, the +300 level on the MCO, is occurring with negative breadth. Under these circumstances we should view the rally as being "corrective" and NOT the start of a bull leg higher.
I continue to remain bearish on the market but expect the rally to continue long enough to work off the oversold condition before declining again to retest the October lows.
Click chart to enlarge