Do not trust this rally. It can only be a new opportunity for the Bears

In recent days, the market has begun a slow but steady road to recovery. However, there are numerous reasons to suspect this rise. More than a recovery seems to be atechnical bounce. One of those circumstances that take advantage of the bears to make big profits quickly.
On the one hand, the recent increase in Wall Street a condition of extreme oversold.Second, in recent days there has been a huge effort to show that the European crisis is in the process of solution. Actually, this seems more a pause than a final path in search of a solution.

The crisis in Europe is such that any solution, it will take many months before they start seeing some results. Greece will continue to generate "noise" in the market. Spain and Italy will continue threatening the stability of the Euro. And the European authorities do not seem to find a common point to solve their problems.

Here at home, initial jobless claims declined for the first time in three weeks, and orders for durable goods improved. 

The Dow Jones Industrial Average ended the day at 12,530, up 34 points, the S&P 500 rose 2 points to 1,321, and the Nasdaq fell 11 points to close at 2,839. The NYSE traded 796 million shares and the Nasdaq crossed 487 million. Advancers on the NYSE were ahead of decliners by 1.4-to-1, and advancers were slightly ahead on the Nasdaq.

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The Nasdaq shows a clear breakdown from the support line at 2,900. And it bounced from the support line at 2,775 on a shallow two-double-bottom. But, unlike the Dow and the S&P 500, it doesn’t seem to attract the buyers needed to make a firm attack on the resistance line at 2,900. Yesterday, it was held back by an underperforming technology sector (-0.9%). 

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Some of the stocks holding the Nasdaq back are also represented in the Russell 2000. This index is a benchmark for small-cap stocks and is slightly more volatile than the Nasdaq. 

The Russell 2000 had a very clear head-and-shoulders breakdown at 785, which gives a downside target of 724. But, unlike the Nasdaq, it along with the other major indices closed higher yesterday. 

Its bounce from the 200-day moving average will most likely result in a rally from an oversold condition, which could result in a rally back to the neckline breakdown at 785. But it’s going to be tough going for the small caps with a couple of weeks of slugging it out to reach that level only to fail and slide to its eventual target of about 724.
Source: Investor Place.