For the second consecutive day, stocks jumped on the opening, but unlike Monday’s aborted rally, buying was maintained at a steady pace throughout the day. Buying was attributed to the fall ofLibya’s dictator, the increased oil supplies, and the positive impact on the economy of lower energy prices.

But it was the expectation that the Fed’s quarterly meeting would produce another stimulus package that also attracted buyers. And even though the market hesitated when an earthquake hit the east coast of theUnited States, it quickly regained its momentum and closed at the high of the day.

The Dow gained 322 points (2.97%), the S&P 500 rose 39 points (3.34%), and the Nasdaq gained 101 points (4.29%). But volume was light compared with recent sessions. The NYSE traded 1.2 billion shares and the Nasdaq crossed 593 million shares. Advancers exceeded decliners on the Big Board by 4.2-to-1 and on the Nasdaq by 4.66-to-1.

As the saying goes, “One robin doesn’t make a spring,” and neither does a single triple-digit rally on the Dow Jones Industrial Average turn a bear to a bull. But the last three days do tell us that the recent lows at the S&P 500’s 1,118 to 1,123 are significant and match the lows of early August, as well as the top of last summer’s consolidation.

Resistance to yesterday’s rally first comes into play at the short-term downtrend line at around 1,178 (red dash line), and then at 1,204 to 1,262 (the blue 50-day moving average). On Monday, we discussed the support zone for the S&P 500.

From the current depressed levels we could see a rally resulting from a new initiative by the Fed or better economic numbers. But the Fed has few tools left to combat the forces of recession, and poor economic data is what caused the recent sell-off.

Technically a rally could take the S&P 500 to as high as 1,262. But so far rallies have not been supported by higher volume; instead higher volume has supported declines and declines have been driven by negative breadth. Despite the negative overtones, our internal indicators are grossly oversold, and this usually precedes a bounce.

Yesterday’s reactive bounce focused on energy and agriculture with higher-than-average volume on the buy side. Therefore, these ETFs and stocks could benefit from an oversold bounce and are in a position to benefit from a trade or long-term investment:

• iShares Dow Jones US Oil Equipment Index (NYSE:IEZ)
• Oil Services HOLDRs (AMEX:OIH)
• SPDR S&P Oil & Gas Equipment & Services (NYSE:XES)
• SPDR S&P Oil & Gas Exploration & Products (NYSE:XOP)
• Energy Select Sector SPDR (NYSE:XLE)
• ELEMENTS Rogers International Commodity Agricultural ETN (NYSE:RJA)
• PowerShares DB Agriculture Fund (NYSE:DBA)
• Potash (NYSE:POT)
• Mosaic Co. (NYSE:MOS)
• CF Industries (NYSE:CF)

Today’s Trading Landscape

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.

• See Serge Berger’s Daily Market Outlook: Market Still in Downtrend Despite Rally
• See Sam Collins’ Trade of the Day: Buy Mosaic on Weakness
• See Serge Berger’s Trade of the Day: Going Long Monsanto Could Prove Fruitful