Of course the market is no longer deeply oversold. I once did a study on the starting NYMO price for wave threes down during the 2007-2009 market decline and found that wave threes - of any decent size - never usually started from a negative number. In fact it was usually just above the zero line.
So the NYMO is nearly perfectly "setup" for a wave (iii) down if thats what the market has in store.
Technically and sentiment-wise, its ripe for a big up move.
Updated Presidential Approval chart. Like the stock market, Obama's approval has not broken the uptrend channel. But it is diverging with last summer's peak. This is a good example of how social mood determines not only stocks but how we feel about our politicians.
The President is more likely sensitive to the Intermediate trend in mood. But Congress' Approval is probably susceptible to the larger degree social mood trend. And as of the 21st of March, Congress' disapproval is still growing. This indicates the larger trend (of Supercycle degree) in social mood is heading more negative.
The stock market rallied since October and Congress got little benefit - although Obama did.
Possible upward flat corrective. It was not a 90% up day. Strong yes, but the SPX closed under 1391. And total volume is uninspiring.
The aforementioned breakdown point was 1388-1391. It would have been better had it been able to close above 1391. Yes we quibble.
Wilshire shown for form.
If it cannot retake resistance, look out below, a wave (iii) surprise downside is coming fast.