Another high volatility day that saw early weakness overpowered by bullish buying. There's probably a portion of that pop that could be attributed to short covering but the afternoon session turned into a pig pile as traders rushed in to chase momentum leaders.
The VIX has now become highly oversold (bullish) so risk loving traders could do worse than pick up a few December out of the money VIX calls. Another quick bearish swoon and gains could be substantial.
Upcoming we have the widely anticipated Santa Claus rally which traditionally kicks in about 5 weeks before Xmas. To thicken the soup earnings season in also ramping up and Macy's (M) blow out results pushed the XRT (retail index) into the wide blue yonder.
All eyes are now on Walmart's Thursday report. If good, expect another substantial uptick.
Still looking for DOW 16,000, it seems just a matter of time.
The SPY model is positive........