Oversold Bounce

Yesterday I stated that the DOW and the market overall was very oversold. Today we had a 235 point rally in the market and significant gains in the S&P and across the board in the indexes. Today at 3:15 I got a buy signal on the exchange traded fund SPY. When I get a buy signal that late in the afternoon the odds are probably 90% that the market gaps up the following day. We will see how long the rally holds but I am anticipating the gap up tomorrow morning. The DOW pushed down to 15949 a couple days ago. I am looking for a higher low in the 15500-15900 range in the next 1-3 weeks before we start drifting higher through the rest of the year. I see the market looking for a bottom here, we can see when the market pushes down it snaps right back up. Oil had a pullback down to 44.68. The key number is oil is 44.14. Today oil got close to the key number and then closed around the 45.20 area. If oil takes out the key number on a closing basis on the daily charts, oil will be in a lot of trouble. If this happens look to short the next rally for a pushdown possibly down to the 38-39 range. When gold hit the 1150-1153 level I was looking for a pullback into the 1127-1135 range. Gold ended up pulling back deeper than I expected, however the pattern is still present. Now I am looking for a pushup in the next 1-5 days. If I get that pushup in gold I would be looking to exit the long position. I would be looking to get out of any gold and gold stocks if gold got above the 1150 level. This trade is based on the significant overbought condition on the daily charts. Long term on the weekly charts gold is in a very negative bearish pattern. I do not see much upside in gold long term.
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