The first attempt to rally off a bottom stalled out at its 20-day MA. We now have invalidated that low, so are looking for the next one. Today's dragonfly doji on higher volumem distribution is another such attempt. We have oversold momentum and bearish net technicals. It's only worth it if the index rallies from the open; a close into the spike low negates the reversal play - we really want to see a gap higher and a solid white candlestick.
The equal-weighted S&P didn't fare so well. It marked a clear break of the swing low attempt and is now looking down at the 200-day MA as the likely next test. Technicals area net bearish and the index is sharply underperforming the weighted S&P.
The S&P might be the better long play here. It opened near 7,650 support and its 20-day MA. It's an aggressive trade but one with potential with a stop on an undercut of today's low. Note how stochastics bounced off the mid-line, this is bullish action.
The Nasdaq may be heading in the other direction. We have a clear 'bull trap' and today's rally has the potential to stall out at 27K. At this point, it may be worth a short, as "bull traps" frequently result in a rapid move back to prior trading range support (down at 25K).
Bitcoin (BTC.X) is offering a pullback opportunity to 82.5K. Today's small doji just above support marks its own buying opportunity; an underdcut of 82.5K negates such an opportunity, but would remain a hold for long term bulls.
For tomorrow, we have a mix of long and shorting opportunities, but these are near term plays that could be quickly negated. The broader trend remains bullish, with the possible exception of the equal-weighted S&P.
Comments
Log in or sign up to join the conversation.