Futures Up This Morning

Positive developments out of Europe are the supposed catalyst for this morning's move up in index futures. However, a more likely explanation is that a high TRIN reading last Friday and elevated TRIN yesterday coupled with rising bearish sentiment indicates that the seller's have been exhausted. If the SP500 can close above yesterday's high, it will confirm that the pullback is probably over. Once the downtrendline of the April to July correction is broken, we will be watching the overall pattern development to see if it evolves as 3 waves as expected or it turns into a 5 wave impulse. The former would indicate a probable flat correction with a retest of the July low this fall. The latter would put the shorts on their heels after another pullback with a higher low in September.