Market Alert - Last Hour

Stocks sold back into midday with SP500, NASDAQ testing the 200 day MA. NASDAQ, SP500, DJ30 tested the 78% Fibonacci retracement. All have rebounded off those lows.

RUTX, SP400 undercut the 200 day and have rebounded to doji with tail over those levels.

SP500 22.22, 0.90%
NASDAQ 63.69, 0.94%
DJ30 196.57, 0.82%
SP400 0.57%
RUTX 0.32%
SOX 2.62%

This is a significant level with the combine of the 78% and 200 day MA. Thus the market has found some support here and it may be able to make something of it. Intraday double bottoms at that support, a rebound, and now setting up intraday ABCD patterns off that afternoon rebound suggest a further bounce into the close.

Do you buy this? Not that thrilled with it ahead of the weekend. Also, there is the final 15 minutes still ahead and unless all the volatility trades are already unwound, there could be selling in that last part of the session.

The market is still in the teeth of the volatility. If the patterns are still there to start next week, we pick some good patterns over the weekend, e.g. AMZN, NFLX and put a bit of money to work and see if that is the end of the first leg lower. We are not risking a lot of money on these plays because there is no confirmation of anything yet. This bounce from support, however, is logical, and if the indices can hold onto it into next week, then it is worth some money to play the rebound from the initial low ahead of the second decline to test that first low. That move up is typically a solid tradable move of a week or more. That is the one we play, make some good money out of the middle of it, then watch for the top and rollover for the test of the prior low.

The rebound has aided some existing plays in a recovery, and that works. If the market is going to hold the gains next week in a signal the more serious relief move is nigh, we want to let them continue their recovery.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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