Looking at this chart, there are plenty of reasons to believe that the overall ugliness will continue, so know a reversal is something that will more likely than not have people scrambling for the exits.
- The S&P 500 E-mini contract has rallied significantly during the trading session on Monday to show signs of life.
- The 3600 level has offered a major support level, and now it is likely to continue being a very volatile mix of pressure.
- If we do break above the 3750 level, then it could kick off an even bigger recovery rally, but I still think there are enough negatives out there to worry about and keep this market down.
This size of the candlestick is of course something that’s worth paying attention to, but that does not necessarily mean that we are going to follow through. After all, we are in a very negative market overall, so these bounces will more likely than not suck people back into the market, only the spit them back out. Bear market rallies can be vicious, so keep that in mind. Looking at this chart, there are plenty of reasons to believe that the overall ugliness will continue, so know a reversal is something that will more likely than not have people scrambling for the exits.
Waiting for Job Numbers
The 50-Day EMA is all the way up at the 3950 level but is sloping lower. You can see that I have a maroon rectangle in that general vicinity, marking what I believe would be significant “market memory” as it was previous support. It should now be resistance going forward, so I would treat it as such. I have no interest in trying to get too cute with this, I think that we are more likely than not going to see a situation where you are fading rallies, although you may have to wait a couple of days to get that. Keep in mind that we have the jobs numbers coming out on Friday, that will obviously slow things down quite a bit towards the end of the week.
Whether or not it is good or bad news remains to be seen, but it is almost certainly something that the market will be focusing on. At this point, it could be a bit of a relief rally, or just a simple lack of interest in the market that is causing the drift higher. This is a short-term room, not something that I would put too much stock into.