Rally convinces some top performers - but not all

First the bad news: In his comment after the market close, Dennis Slothower of Stealth Stocks Daily explicitly cited Wednesday's last-hour rescue rally as cause for caution.

He wrote: "The intervention we are seeing in the markets right now is blatant and strong -- apparently hoping to convince J.Q. Public that the train is leaving the station. There is a strong and concerted effort by the Fed, the administration and their cooperatives to paint this tape higher and higher, without any pull back.

He continued: "The normal process of backing and filling has not been allowed to take a normal course, possibly out of fear that it will get out of hand and seriously challenge the new bear market low set on March 6th -- just a few weeks ago."

Slothower's point: "This kind of intervention often ends badly though, as no selling relief leads to a pressure point where eventual selling erupts into a volatile profit taking decline over a day or two that can quickly remove weeks of gains." (Marketwatch)

The other two newsletters cited seem to be building up some faith in this rally, but the above quotes have to be taken seriously. The manipulations are fairly obvious when one is looking at the markets as they happen. Interventions have to be cost-effective, so usually take place at crucial times of uncertainty... such as now.

Having rallied some 20% one could call this a new bull market - after all, a 20% drop signalled a bear market. The 800 level of the S&P 500 is important here. However, the 200-day moving average is still just above 1,000, so another 25% higher. The index has, however, broken above the 50DMA. I would wait for this level to be tested and, if holds, would be a weak buying opportunity.