The price action in SPY showed some real strength in that it gapped up, never filled, and closed above the open. When the market is coming off an oversold level in an uptrend and is still not overbought, this pattern will often be followed by further gains. This was shown in the subscriber letter last night (click here for a free trial). And in the 5/22/12 letter I also showed that when the SPY pattern occurs following a short-term low it appears to provide a bullish edge, but when it occurs after an intermediate-term low then the bullish inclinations no longer hold true. The current setup is bullish and I have updated the stats below.
The reliability and the size of the moves are both impressive. This study suggests the rough start this morning is likely to be overcome in the next few days.