I think we have an important test coming. According to Dow Theory the primary trend is still down. However there is a nonconfirmation in progress. So far the transports have broken below their Nov. lows but the industrials have not. That is potentially bullish as many bottoms and tops occur with just such as nonconfirmation.
I've included the oil chart because I think it is going to be key as to whether the Dow confirms the transports or not. The reason being is that XOM and CVX are the number 2 and 3 heaviest weightings in the Dow. If oil breaks below $35 the energy stocks are going to probably react badly. We know the market can't rally with out the banks but I would say it's not going to be able to rally without energy either.
There is another consideration that could be calling for another forced liquidation like we saw in Oct. and Nov. I'll go over this in tonight's report.