No sir, my stuff says not an IT low

I went over alot of 'stuff' last night, and I was doubting that wonder rally, but todays action is confirmation - no way do I believe a major low is in here, at least, not without at least closing those big gaps and effectively retesting the lows.

Here's why I don't believe it - maybe I'm just being dumb, and over confident because I've been on a roll since last November, but I'm just following my system, and trying not hedge what I say, and call it as I see it - right or wrong....otherwise why bother...at least you can get some use by fading me that way

Why I don't see a major low-
First, what do I mean 'major' -
1. Rally won't get back above above 1370 on SPX ( only another 3% from yesterdays closing high).
2. Rally won't last more than a 2 weeks before gaps below get closed.

Why -
The are only 2 types fo major low i've ever seen or studied, and i've studied alot of market history.
1. Washout/Panic low - V reversal off total panic - see Aug 13-15 2007
2. Exhaustion-divergance low - see Nov 19-26 2007

Yesterday was neigher, and here is why.
1. Not a Washout/Panic low
New lows didn't expand to panic, stocks below 50day ma ( NYA50 stock charts) didn't expand, trin never rose, never saw a washout candle (see yesterdays question comment), BP's never spiked down.
All other wahout -V's reversals have seen that.

2. Not Exhaustion-divergance low
Most internals had NO divergance, e.g. New high, new lows, volume etc ..and what one's there was are far too WEAK compared to major IT lows.

Absolutely sentiment supported the chance of a IT, but technicals as I read them, say it wasn't.
The rally like the preivous setup like this since Nov top, has reset sentiment to more bullish from bearish extreme, and cleared shorts out that were clogging the system - we can see how quickly folks turn bullish in the 6 pt drop in VIX yesterday, and drop in put/call....and Rydex where traders embraced this rally.

More subjective, but nonetheless I find predictive, the sentiment reaction to yesterday.
WAY too much acceptance by traders that a major low is it - especially as the same people who have been bullish bias all the way down are out again, I won't name many names but Mark Hulbert is one. He couldn't wait one day to publish again about how bullish 90% up days are - even though we've had 3 that have failed in the last 2 months!! ...one of just 6 days ago infact.

Now add todays price action. There *should* have been another big gap up today and follow through...because if an IT low, there's no way the bears would be allowed to cover...its would be squeeze-er-roo until all obvious resistance was gone.

Most don't believe ewave, but its served me very well - all I know it that move off the low isn't natural, nor impulsive...that's not a good combination for its long term survival.

We may rally some more, perhaps to 1370 to close the open gap above over the next week, but at this point, my work says we will go down to close the open gap/retest the low at minimum before chance of the 'major low' everyone is apparenly desperate for. ..and I wouldn't even be surprized to see us close those gaps today.


Mark.