Big Stock Market Gains On Fool's Day...

The stock market saw healthy gains yesterday. It was April Fool's day, though!

This morning, the pre-market looks like we may see a gap up. With Ben Bernanke scheduled to speak at 9:30 a.m. EST, it could be an interesting morning depending on what he says.

So, where are we?
We've go another green Trade Triangle on the daily chart. Recall that the weekly chart had been showing a green Trade Triangle. Ideally, we want these indicators consistent on multiple time frames.

On the daily chart, we bottomed out back in mid-March and I've been looking for a re-test of those lows around 1,275. The market seemed to be setting for that re-test, but yesterday's rally pushed through the recent swing high at 1,350.

I may want to start smoothing out my deltas, getting a bit more neutral. I've been maintaining a negative delta in light of the chronically weak market. Depending on how we follow up here I may be inclined to start reducing the negative bias and begin adding additional positive deltas.

One big day does not make for a rally, though.

Christopher Smith
TheOptionClub.com