I don't know if today's rally was due to it being a Merger Monday, month & quarter end markups or a technical bounce. It was probably a little of each. Today was a Jewish holiday though which explains why the volume was so light. That lack of volume is the sole weak spot in what otherwise looked like a very good day for the bulls. But low volume or not, the trend table is showing nothing but "up" again after today's pop. There's potentially resistance at last Wednesday's highs, which is where the post-Fed selling kicked in. I expect some fireworks if & when the indices return to those levels. We could either have late bulls trying to sell to get out at break-even or shorts covering as the market threatens to make new highs.
All the trends are up once again...
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Up | Up | Up |
| Intermediate | Up | Up | Up |
| Short-term | Up(+) | Up(+) | Up(+) |
(+) 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.
Those stochastics sure make it look like we are ready to roar yet again...
The market clearly had a strong morning rally, but then it formed a rising wedge which broke right around 1064. From there, prices just rolled until the final minutes of trade - likely a result of day traders going flat.
Unfortunately, we can not conclude much for the bears or the bulls today. The balance of the week will tell us more - starting with tomorrow.
I am particularly focused on a break below 1060 and 1056 - this could lead to a full retracement at 1041 and a continuation of the down trend.
Alternatively, a break-out aboive 1065 would be very bullish and could result in a test of the 1073 seller and of course the intraday high of last Wednesday.