Good evening StockBandits!
Friday’s lift may have failed to impress with light volume and modest upside, but today we saw acceleration that made the current rebound take on the familiar V-shaped recovery like so many previous dips. With an upside gap to start the day, the strength could easily have been sold, but it wasn’t – at all. In fact, the open was the low and we simply moved higher from there.
Although today’s rally didn’t eliminate the declines seen last week, it did do something important for the averages: it gave them some elbow room. When caught in a trading range, the boundaries are where the danger or opportunity lie, depending upon how you’re positioned. In the midst of the range, however, having some freedom to rally or decline without testing the boundaries keeps emotions at bay.
That’s not necessarily a great thing for trading though, as we could drift up or down from here and still not see anything significant. For tonight, the bulls have reminded the bears of their presence and willingness to buy the dip. Interestingly, we just saw a higher low form on both the S&P 500 and RUT daily charts, so now our attention turns back to the recent highs and whether or not they can be cleared.
Let’s get to the charts.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
