S&P attempting to Rally

Today all the important indexes had big gains, the S&P 500 surged more than 100 points. I'm not really that excited about this rally, not yet, I have mentioned several times in previous articles that since Nov/05/2021 the S&P hasn't had a multi-day rally that lasts more than four days. It would be great to see some force from the Bulls but there are still a few obstacles on the way.

One of my concerns comes from the daily chart of the S&P 500, since Jan/04 when the index got to 4,818 the daily chart has been reaching lower highs (horizontal black line). If today's action is really attempting to challenge the Bears it needs at the very least to break and hold with force above 4,400. That's just the beginning from my point of view, a serious rally should break past 4,600. If the S&P can't even break past 4,400 we will end just with another lower high.

Another concern comes from the numbers of New Highs and New Lows (NH-NL), for all the timeframes there was a drastic reduction of the Lows (orange columns D, H, K). That signals a reduction of the selling pressure. I didn't like what I saw with the New Highs in all the timeframes, the numbers also decreased for the Highs (green columns, C, G, J). This doesn't necessarily mean that the rally will fail, but I would expect tomorrow to see a significant increase in those Highs if the rally is to continue.

I'm still waiting on the sidelines until I see more evidence that this rally is for real. This Correction is testing my patience, having a side project related to the stock Market helps. I'm moving my stock picking methodology to follow Mark Minervini's way of trading (I was using Stan Weinstein's ideas before). The hardest part at this point is getting and processing the data, I'm using Sharadar (via Nasdaq Data Link) and then processing it with Python. Let's see what the second half of the trading week brings us.