Another red day in the markets. No surprises there. But the bulls can take heart from the fact that the markets bounced from MA(200). Like I mentioned yesterday, this was pretty much the last fortress for the bulls and it is very important that this holds.
Now ideally, I would like to see a bounce from these levels. The bulls don't want a consolidation at MA(200) levels because that would ultimately lead to a breakdown. You want the MA(200) to act as a springboard, not as a consolidation area. Any consolidation should ideally take place at a resistance level in case you are bullish. The markets are way oversold as indicated by the McClellan Oscillator charts below. This, coupled with the fact that MA(200) held today, make me like the odds of a short term bounce here. And in case we do get a bounce here, pay close attention to the accompanying volume.
Take care and good luck!