Not a very exciting day in the markets as the stocks made the lows for the day in the very first minute and then it was a pretty drab affair after that. I still expect that a bounce will occur sooner rather than later, but looking at the charts, I feel this bounce will a good shorting opportunity rather than an opportunity to go long. Let me show u readers what I am seeing.
Let's have a look at the S&P chart first.
We ended today just below the level I had marked last week. When I had marked this level last week, it was support but now obviously, this support has become resistance. And if we do manage to cross the 1083 level, straight ahead lies the MA(50). Now if that wasn't enough, MA(200) will soon start declining to provide further resistance in this congested area.
The story at NASDAQ, if anything, is even worse.
Add to that the fact that the volume today was lower than the recent down days. Doesn't make a pretty picture does it? All this would make very cautious about the likely bounce. It's not wrong to go long if you want to play this bounce, but I would recommend being in taking profits off the table.
Pretty much all the stock's from last night's watchlist performed well today, with NSU in particular, being up 5%. Since all these long and short setups are still in play, I wont be coming up with a separate watchlist tonight. Here is the link to that watchlist in case you missed it.
Take care and good luck!