A Significant Rally?

Thanks to the Contrary Investor, who brought the following ROC indictor to my attention, the following chart illustrates the indicator. What you see is the largest ten-day percentage advance, as measured by the ROC, in the S&P 500 since 1938. Over the last thirty years, never has there been such a 10-day move in the ROC. All other moves that even came close were major bottoms followed by incredible price advances. Why is this knowledge relevant? First, it provides evidence to the bear market rally that I have been mentioning. (See posting from the other day.) Second, we need to respect what the ROC is indicating and remain mindful that prices could rally further. Third, if this turns out to be a major Bear Market bottom, our exponential moving averages (15 and 40) will confirm it. Fourth, if this does not turn out to be a major Bear Market bottom, I would take that as being extremely bearish.

Note: Click inside of chart to enlarge it.