This market bounce is a bear flag before it could become a legit rally because the definition of a bear flag is a rising market following a decline, happening on decreasing volume.
The US stock market as represented by SPY, has bounced as anticipated after SPY hit the pattern’s measured target (while SPX fell just shy of its equivalent target). There was some volume on yesterday’s up day, but it was FOMC day and that usually titillates the machines and day traders. But volume is in a declining pattern, consistent with a bear flag.
As the soon to be former subscriber who critiqued my management of the stock market (allowing for a bounce or rally) noted, it’s a kiss of the 200 day moving average. Kiss of death? That remains to be seen. But the declining volume with the candlestick posture is not positive at this time.
If this proves to be bear flag and more downside results from it we don’t go whole hog bear market until the August 5th low of 507 is taken out. But frankly, this flag is tempting me to poke short for a trade at least. If so, a bust above the SMA 200 and/or the resistance at 576 can be used as a stop loss.
NFTRH+ trade setup ideas are presented for consideration and further research only, not as recommendations. I may or may not personally take positions in all or even most NFTRH+ ideas, as it would depend on my portfolio composition at any given time. “Stop loss” and target levels are usually noted and should be respected.
And we have quarter end option expiration this week, often a time for tumult in the Big Casino.