We played for a bounce and the various bottom signals indeed produced one, but it’s all a bit sad isn’t it? What happened to this proud bull market? We haven’t even managed to reconnect to the 5EMA yet on the $SPX. The good news for buyers could be that the longer we stay disconnected from basic MAs the more likely the reconnect will be and, to boot, we have higher lows:
In addition plenty of short term oversold conditions exist providing for potential bounce power. Yet it should be clear this is not your regular QE get ready for new highs by the next POMO operation market. Its character has changed and significant technical damage has occurred.
For now there is plenty of strong resistance above with plenty of buyers still trapped higher hoping to get out. Having a detailed trade plan with a thought-out strategy becomes ever more critical to navigate through this chop.
Categories: Daily Market Brief