The S & P 500 SPDR ETF (NYSE: SPY) looks to be trying to rally.



Chart Courtesy of StockCharts.com



Boy are we bearish. And boy does that SPY ETF look as if it's setting up for a rally.

No, we're not talking out of both sides of our mouth. We are bearish, and the market does look poised to bounce. Look at the technicals.

SPY fell to the 109 area in a big way last week. But it didn't fall any further and it bounced back yesterday as the Federal Reserve's statement was less bearish than recent such statements.

Volume rose yesterday as the market rallied. The market is oversold based on the usual gaggle of oscillators, especially RSI. And the sentiment is as dark as we've seen in some time.

The big earnings are almost done, and they've actually been pretty good, all things considered. Revenues have improved some, and folks just aren't complaining as much.

How does this all add up? Rising bearish sentiment coupled with a bottom in the charts is worth considering as a potential trading opportunity on the long side.

Does that mean you make big bets and think that any rally is fool proof? No. But situations such as the current one are worth exploring. There is resistance overhead at 1110-1120 on the S & P 500. But if the market can blast above that resistance band it could move back to 1150.

In a market such as this one you have to have your eyes open and trade the charts.

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