One of the signs that the market is trying to put in an intermediate bottom is a quick flip in breadth. One of the things I watch for is a move above the zero line by the McClellan oscillator. Usually once this occurs the oscillator tends to hold above zero for a month or more.
We just got that move into positive territory. Consider that this move pushed the oscillator to levels not seen in 10 years and that it came from the most depressed level in 10 years. Just another sign that the market is likely setting up for a very powerful 4th quarter rally.
If and when the 1-2-3 reversal completes and signals a trend change I'm guessing we are going to start seeing performance anxiety from many fund managers as they try to improve their yearly numbers. That should add fuel to the fire.
I still think the market will likely trade up to and maybe even past the 200 DMA before this rally exhausts itself and the market rolls over into the second phase of the bear market.