A very frustrating day for the bulls. That too on so many levels. Let's first get the charts out of the way.
Daily chart - The markets gapped up but the bulls were not able to hold on to the gains. In fact, the markets gave up the entire gains and were red for a while, only ending in black thanks to the action in the last few minutes. 1040 will be a tough nut to crack.
Why was this frustrating?
(a) Is that the best the bulls could do after almost 10 consecutive down days?
(b) With good news from China and the European and Asian markets way up, and no really bad news, at least none that we didn't know off already, over here, a healthy market would have done a much better job of holding on to the gains.
5 minute chart - I just wanted to bring to your attention the positive divergences in MACD and RSI before the end of the day bounce in the markets. I find these divergences such as these a high probability play to go long.
Going through some of the blogs I follow and messages on twitter, I see feelings of frustration beginning to creep in within many traders. I don't wanna sound like a prick here but this is good if you are long! The markets are going to bottom when more and more people throw in the towel. And I see that beginning to happen. I might end up being completely wrong but I still think being long is the high probability play here. Too many traders out there are calling for a double dip and taking out charts from the great depression. All this makes me like the odds of a short term bounce here. And if I turn out wrong, that's what the stops are for. Damn! This is exciting stuff.
In trading, just as in life, sometimes you just gotta go against the wind....
Take care and good luck!