Update (June 30, 2012 - still a bear market rally

Impressive rally on Friday but breadth was weak compared to the way prices advanced.

First, it was not a 90% up volume day. This is a clear sign of weakness given the huge gap up and the rise into the close.

Second, short term TRIN (a 3 day ema of TRIN) is underperforming and did not even reach the overbought level.

This weakness as the market rallies is not something that happened during the bull comebacks of 2010 and 2011, so this is still a bear rally.

Even if I think the market will head higher over the intermediate term, probably as the economy bounces a little, it is important to classify this rise as a bear rally as it will eventually offer a great opportunity to sell.