Blogoland is aflame with answering the question: is the bottom in? The question can be attempted to be answered using technicals, fundamentals, macro, whatever. None will give you a definitive answer that is guaranteed to be correct.

Using the chart/indicator model simply because it’s easy and doesn’t require too much effort; on a 3 month time frame, bracketed with statistical deviations, price hit the lower bounds the day before yesterday, hence, a bounce could be expected, which duly arrived. We have the bounce moving towards a now falling VWAP [but this could be any MA] which is a reversion to the mean trade.

Technically the question is what happens when price meets the falling MA? Does it burst through to the upside, or, do short sellers step back in? Who knows. That of course is the point. Wait and find out. Of course if you are daytrading or very short swing trades, this is too long, trades need to be turned over more frequently.

From a macro point of view: China is a problem that is starting to show. This I doubt is going away anytime soon. If China implodes, do you really think the US market will escape unscathed? Europe is doing nothing and likely adds nothing for quite some time yet. Emerging markets other than China are all having their own issues.

The US economy is not really recovering as it should. It has moved a little on a few trillions of stimulus, but is that really bullish?