Today was a good showing for the bulls considering how weak things were looking in the pre-market session this morning. The Nasdaq didn’t drop low enough to retest its January low but the Nasdaq-100 (QQQQ) got to within 50 cents of its January low. I don’t know if we can officially call that a retest but it doesn’t really matter. If it is a double bottom it won’t be confirmed until it clears the highest-high between the two lows.
The S&P 500 bounced off of support from Jan. 25th & 28th.
The small caps lead the way down and are now showing good relative strength.
The Russell 2000 is close enough to its 10-day moving average for me to call its short-term trend lateral.
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Down | Down | Down |
| Intermediate | Down | Down | Down |
| Short-term | Down | Down | Lat(+) |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
TM – Check out the reverse head and shoulders formations in the bank index (BKX), cyclicals index (CYC), Citigroup, Capital One and a slew of others. Many stocks and indices have traded up through their 20-day MA kissed the upper bollinger band and are now bouncing off their 20-day. I think we’re about to have a significant stock market rally.
What are options players and implied volatilities indicating at 1, 3 and 6 months? In my view, this would be the last piece of info before I would shift my technical view to the upside.
But then I would have to get beyond all the proverbial shit hitting the fundamental fan.