This market is ridiculous, it has acted like this for a while. These meteoric rallies for little fundamental or technical reasons when the market is deeply entrenched in downtrend must be fuelled by short covering and then a stupid crowd of long term buyers (I don't think a lot of traders get on board for these big moves). These big swings are a sign something is up. How do I explain the rally: 07/07 US traders buy oversold conditions at the open, some just shrug London bombing > short covering > more buyers come with the sign of strength> bullish close brings technical buyers and those who think if the market can stand a terrorist attack it 's very bullish > more shortcovering > (S&P head and shoulders shorts not lucky)> and more stupid fund managers buying