David Fuller's view This is a positive turnaround today - an outside day to the upside, the key characteristic although strictly speaking this is a ranging pattern. I mentioned last week that if Wall Street could hold half of its rally from the early July low, that it would suggest an important low in early July and support building. One good intraday rebound does not confirm this but a close above 1100 would be another small improvement at a time when sentiment is quite bearish.

My worst case scenario is that the S&P breaks the 1000 level but encounters support from the upper region of the base, commencing around 950. My best case scenario is that the S&P ranges sideways to somewhat higher during what is often a period of seasonal uncertainty and indifference, before strengthening in 4Q 2010.

Among key factors causing me to regard bearish sentiment on Wall Street as a contrary indicator is the very steady performance of most Fullermoney themes, strong GDP growth from emerging (progressing) Asia, a positive yield curve in the USA, generally low interest rates and reasonably attractive valuations. (See also Eoin's section on China below.)