NFTRH; US Market Bounce Progress

DOW has reached initial resistance with bounce target #1 about 100 points higher.

dow

SPX is right at its 200 day moving average and August low, and could be more telling as to what the market has planned.

spx

NDX is approaching bounce target #1, with Apple iPhone sales making the morning headlines and QQQ +.68% in pre-US open.

ndx

RUT is a signal leader and as noted in this week’s report it should be watched closely.  Its renewed strength yesterday morning was a positive S/T signal for the markets.  RUT’s initial resistance is the May (as opposed to August) lows because it had been relatively weak in the spring and summer.  RUT is also in a weekly topping pattern with its neckline beginning at around 1100.  But a test of the now declining SMA 50 (1130) could also happen with RUT remaining bearish.

rut

Bottom Line

With the shock that took so many bulls by surprise the process of them regaining their composure and maybe even bringing back a little bravado only just began 2 trading days ago.  It has not been a grinding low, it has been a ‘V’ low, bringing the markets near point #1 quickly.

More time may be needed to smooth out the psychology and considering that there are 3 bounce targets (assuming this is only a bounce) we might keep in mind how the market’s interim swings always seem to test the limits.

That said, these are the modern, information connected markets and they scan every Fed Jawbone and every economic data point and its implications on interest rates, often react wildly.  So we’ll keep an in-week view nice and tight for those interested in the play by plays.  But most people should probably hold to their longer-term views and go accordingly.

Mine happens to be that I think this bounce will find resistance and put on another leg down and then make a trade-able bottom.  But that is totally subject to incoming information.  We had a nice crack in the market, which we were more than ready for because so many data points and divergences said it was coming.  Now the very short-term is less clear and patience is key.