Here is a line chart of the number of issues traded on the New York Stock Exchange which advance in price. The purple line is the 5 day moving average of this number. I last commented on this indicator here.
It is my view that the drop which began after the Fed announced its latest rate cut is a normal reaction within an uptrend that began from the low on November 27 at 1417 in the March '08 e-mini contract and 1406 in the cash S&P. The advancing issues chart you see above shows that the market has moved down to an oversold condition roughly as deep as those in early and late November. Moreover, you can see that the daily numbers are making a low higher than the one made earlier on the way down from the December 11 high.
I think this indicator is telling us that the reaction is about over and that the market will soon resume its rally. I expect the e-minis to trade over the 1600 level sometime in January or February.