Markets have all experienced a strong bounce from important levels of support and moving averages.
$SPY I need to emphasize the posts from late last week, the DIRECTION of the 50 DMA is more important than a day or two below it. Now that we got our “fast move” from the “failed move” below 143 and the 50 DMA, the market is approaching the prior resistance near 147 (today’s action has temporarily been halted at daily R2 at 146.26) The trend is still up and our job is not to try to pick tops but to be aware of potential resistance levels and to MANAGE RISK.
$QQQ hasn’t bounced quite as strong and is at the top end of the prior band of support at 68-6825, I would expect this market to slow down a bit here to regather strength. The most important thing this market can do is to hold above the low from this morning, that is our important higher low to measure the turn back up from.
$IWM impressively cleared the 83-8325 band of prior support and now 8425-8450 looks like the next challenging level to overcome. A pause where the market gets to rest would be constructive as long as it holds above ~8350
$SMH semiconductors remain the weakest area of this market and so far, the prior support at 3150 is acting as resistance. If the semis can hold above 3100, then we have the chance for a push beyond 3150 and that would help to turn the daily chart more neutral but it remains a weak area of the market which all but the most nimble of traders should avoid.
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