There was a quick 2nd tap down to Friday lows on many charts Monday morning, however the market bounced from there and rose into the close. Market index futures were front running their respective indices all day, and then suddenly took a dump minutes from the close. The NQ dropped 10 to 15 points, and the YM dropped 30 by the close. Overall, not enough progress was made to erase last week’s shock event from the charts, HOWEVER the bounce stopped market bleeding and appeared to temporarily stabilize price.
Market Notes
- Market firmed after bounce off Friday lows
- First price stabilization after shock event
- Upward trend has NOT changed
- Continued market pull back is possible
- Volatility compressed Monday but remains elevated
- Monday was a low volume up day (no accumulation))
Market Charts
While technical damage is apparent in some areas, we have yet to discover if the psychology guiding the daily markets has truly changed. The two charts below help to define the current landscape.
S&P Stocks Above 200 MA (dropping but long term still favors bulls)
S&P Stocks Above 50 MA (mid-term clearly favosr bears)
The short term is a question mark (1 to 2 days). We can certainly inch or even explode higher from Monday’s closing highs OR big volume could quickly return along with more selling and distribution by as early as Tuesday.
I wish you “Good Luck” with your own trading (Luck = Preparation + Opportunity + a little Risk).
FacesInCabs
