The mother of all rallies occurred in the afternoon as the indices exploded in very strong 5-wave rally that left them at or very near the highs for the day going away on the close in a major turnaround rally.

The day started out with a move lower on pre-market futures being down. They did bounce sharply early in the morning but failed to get through overhead and moving average resistance, and then rolled over hard and spiked down by late morning to reach 1110 on the Nasdaq 100 and just under 819 on the S&P 500, which are new multi-year lows on both indices, At 1 o'clock when President Bush was speaking, the indices turned around sharply, rallied strongly in about a 25-30 minute span, and then backed off to retest intraday support, held successfully, and came in another equally strong wave. With about an hour to go they pulled back and came on even stronger into the close, as shorts were squeezed and they ran for cover today.

The Dow ran from 7965 to 8876, more than 900 points, closing up 552 on the day. The S&P 500 turned around from 819 to 913, and closed up 59 points at 911. The Nasdaq 100 ran from 1110 to 1241, a 131-point rally, and closed at the high for the day going way, up 75.55. The Philadelphia Semiconductor Index (SOXX) was up about 7% today, up 14.36.

Advance-declines were positive by 3 to 1 on New York and about 2 1/2 to 1 on Nasdaq. Up/down volume was the story, with more than 1.8 billion traded to the upside and only 144 million to the downside on New York, about a 13 to 1 positive ratio. Nasdaq's ratio was even stronger, with 2.7 billion to the upside and just 328 million to the downside, about an 8 to 1 ratio.

TheTechTrader.com board was extremely strong with many point-plus gainers. Leading the way was CF Industries (CF) at 60.45 up 8.22, AFAM up 5.30, AAPL 6.32, DIG 5.90, the EWZ 4.09, FXI 3.58, the QLD up 3.09. The USO jumped 3.25 on the rise in oil.

Agriculture stocks were extremely strong today. In addition to CF, POT was up 4.54, MOS 3.93, and AGU 3.67.

Other point-plus gainers included SQNM up 1.87 to 17.53, UAUA 1.67, SIGM 1.06, MS 1.27, EXM up 1.40. Portfolio position DRYS had a terrific session up 1.87 on 10 million shares today. ENER jumped 5.86, BRCM 1.36, ANR up 4, and ACH 1.72. It was a big session across the board.

On the downside, there were some fractional losses, but the big losses occurred in the ultrashort ETFs, which got hammered, with the SDS dropping 14.15 to 90.79 and the QID down 10.12 to 71.28.

Stepping back and reviewing the hourly chart patterns, not only did the indices take out several layers of support and the declining tops line but they took out the 5-day trendline and declining moving average and closed at the high for the day going away. You cannot get much more of a stronger close than we had today, that's for sure Very impressive indeed!

As they say, bear market rallies are the strongest and sharpest, and we need some solid follow-through and proof positive that indeed an important low has been put in before we declare that. In last night's Chart of the Day video of the SPX & NDX we indicated that we were looking for an important low in the next 24-48 hours and it certainly appears we got that today. Now all we'll need is an extension and strong follow-through, and perhaps we've seen an important low and the beginning of a strong year-end rally.

Harry Boxer is a technical consultant to many Wall Street hedge funds and large institutional traders, and author of TheTechTrader.com, a real-time diary of his day, swing and intermediate-term trades. For more of Harry Boxer, sign up for a free 15-day trial to his Real-Time Technical Trading Diary, or sign up for a free 30-day trial to his Top Charts of the Week service.