A closer look at the attempt:
First 2 weeks: Rally started on Mar 10th. Its first week was unimpressive. Started as a reaction to an 'leaked' Citibank memo saying it was 'operationally profitable' - any excuse for a rally. There was a distribution day on Mar 16th soon after. Depth sucked - Bespoke reports that the big day up on Mar 10, and again for the whole first two weeks of the rally (including the big day up on 23rd).
Bespoke: Before the 10th, the market was so oversold that it requires a substantial rally just to work it off : "Before Tuesday's move can be considered anything more than an 'oversold' rally, we are going to need a few more days of similar action.".
We may be willing to overlook the distribution day on the 22nd due to options expiration.
Conclusion: First two weeks are just an oversold rally. Doesn't mean anything yet.
3rd Week: Starting to see a better pattern of accumulation days on high vol and drops on low vol.
IBD reports market depth starting to look OK (26th Mar):
- IBD100 keeping up with indexes, but "only a handful" of top rated stocks rising in high vol.
- Bredth of the rally is impressive: only one industry group (funerals) is down since the Mar 11th rally, and defensive plays (food, utilities) are up less than the indexes.
Conclusion: Wait for the pullback - on lower vol. See if market depth keeps improving. That would convince me that this is at least this is at least a tradable rally. It may even be the turning point....