Recent Fed actions and deeply oversold conditions have helped create a very powerful bounce, however, it seems that the effect of these market-supporting factors may be coming to an end for now.
A quick look at S&P 500 breadth shows this. The percentages of stocks trading above their 5, 10 and 20-day averages are above or close to the +1SD line (for the charts below, this is a standard deviation above the 1-year average for the indicator). This means that the market could become overbought after another positive session or two.
Incidentally, the bounce has put the S&P 500 above its 50-day moving average for the first time this year. To some analysts, this is a significantly bullish sign. It’s too soon to tell.