Indecision resolved to the up side, more gains possible

Yesterday, I wrote that the market should be going lower today. The 56 point gain in the Dow we got instead proves once again why you should never use the word "should" when talking about the market. In my defense, I will point out that I was concerned that the futures were not echoing what looked like bearish chart patterns. Turns out I should have (oops - there I go again) had more faith in the futures.

One call I did get right was the VIX, which also went higher today, though not by much. Anyway, if you look at the Dow chart, you see Monday's big run-up followed by yesterday's doji indicating indecision. The decision was made today, and it's up. And having broken out over the resistance highs from the last two days, it appears that there there is no further resistance until 12,760, another 150 points from here.

And the futures are up once again this evening at 1 AM EDT, only tonight they're up even more than last night at this hour, with ES up over half a percent, a strong showing for this hour. I learned that lesson last night - I'm not going to vote against the futures tonight.

We're apparently now in one of these phases where the indicators all get broken at oversold levels and lose their predictive power. Sometimes this can go on for days. Back in March, we stayed oversold for two whole weeks before pulling back.

I checked on J-Trader's Market Analysis and note that he has canceled his short signal too, so I guess I wasn't the only one who got fooled here. Sometimes it just all boils down to, you can't fight the tape, the trend is your friend [insert favorite market cliche here] so my best guess is that we're going higher again tomorrow.