Last Wednesday, I wrote that that day's second downside day in a week meant "…it will now take nothing less than a 90% upside day to sound a possible 'all-clear'".

Well, today was nothing less than a 90% upside day (93%, to be precise) - which means that we now have a "possible all-clear".

Friday was a semi-climactic low, however, which occurred after seven straight down days. It is therefore likely to be tested in some way, shape or form over the short-term, and the intensity (or lack of intensity) of the selling during any such short-term test will tell us if Friday's low has more than just short-term significance or not.

David Fuller's view From Friday's intraday low to yesterday's closing high was marginally the best gain for the S&P 500 Index since the year's high to date on 14th September, and it came after some downside acceleration commencing on 7th November. Therefore we have seen at least a near-term selling climax.

We know that the US Presidential Election result on 6th November surprised many wealthy US investors, both Democrats and especially Republicans. Their selling over the last two weeks was mainly in anticipation of the tax increases that President Obama has promised.

Since the S&P 500 Index is still approximately 130 points above its January and June lows, we can assume that there are remaining profits to be taken by wealthy US investors, particularly if the market stays reasonably firm between now and yearend 2012.

However, there are many other factors for both US and global investors to consider. Among these, the S&P 500 Index is on the higher side of its range since 2000 and if I recall correctly, Wall Street tends to do better on average during the second half of its four-year presidential terms.

Elsewhere, I maintain that Europe is perceived by investors as less of a crisis today than one or two years ago. However, concern over China's slowing economy has increased, not least while the stock market is testing its lows.

Lastly and most importantly, global GDP growth remains a concern and is therefore being addressed by record levels of quantitative easing (QE) from the world's main central banks. That is positive for equities, especially while commodity prices remain rangebound.