Yesterday's Late Rally A Bullish Sign?

Yesterday market was down significantly, until it rallied late in the day. On the surface this may seem positive for the markets, but Don Vialoux disagrees: 

Technical action by S&P 500 stocks was significantly bearish yesterday despite late “short covering” gains by the Index on rumors of intentions by China to buy Italian sovereign debt. No S&P 500 stocks broke resistance and 23 stocks broke support. The list of break downs is too long to include in this letter. Notable among stocks breaking support were Energy, Material and Transportation stocks. Charts on some are offered below. The Up/Down ratio was unchanged at (38/441=) 0.09

Technical action by TSX Composite stocks also was significantly bearish yesterday. No TSX stocks broke resistance and 18 stocks broke support. The list is too long to include in this report. Notable among stocks breaking support were Energy, Life Insurance, Uranium and Mining stocks. Charts on some are offered below. The Up/Down ratio eased from 0.34 to (58/180=) 0.32.

Read more here: http://www.timingthemarket.ca/techtalk/2011/09/13/tech-talk-for-tuesday-september-13th-2011/