BIG ARMS

Dick Arms at realmoney.com with a bullish article this morning as he sees a significant bounce coming. He has been pretty bearish in his recent writings and he has been spot on. Here is what he says today:

Thursday's reaction to the leaked contents of the Bernanke speech ... and then the second thoughts ... and then the third thoughts, etc., all point out the extremely high levels of apprehension at this time.

But underlying it is the factor we looked at two days ago: the most oversold market condition in many months, as evidenced by the Arms Index moving averages. It looked then as though we were on the brink of a substantial rally. Wednesday and Thursday's strong advance may have been the start of that advance, but it looks as though there is still a great deal more ahead.
The bounce on Wednesday came right at the August lows, as can be seen on the chart below. Moreover, it was right at the ascending trendline that goes back to 2003, and defines the bull market we have been in since then.

Thursday's early weakness tested the lows of the day before and set the stage for the Bernanke rally. But it is not easy to turn a market that has been as weak as we have seen in the last 10 sessions. It may take a while longer to get things going, but it looks as though there is a more substantial rally in the cards over the coming days, and perhaps weeks. If you are an aggressive market participant and are not yet long, some buying in here would seem to make sense.

Yeah, I agree;