The S&P gained over 1% with a second bounce off the 200-day MA. But, it's a bounce which has come a little soon given the last test of the 200-day MA was earlier in the month. Supply kicks in on a move above 2,100, and the 50-day MA is also lurking around this price level to offer resistance. Technicals are net bearish. My hunch suggests the sellers are going to regain control, but bulls will be looking to press today's advantage.
The Nasdaq closed the gap from Monday, but there is more work for bulls to do. The 'bull trap' above 5,200 is dominant, but today' buying amounted to a successful defense of converged 20-day and 50-day MAs. However, a test of the 200-day MA is long overdue.
The Semiconductor Index had a tricky day. It gained against recent day's losses, but it hasn't really offered the makings of strong bottom, at least not yet. This will make a recovery in the Nasdaq and Nasdaq 100 more difficult.
For tomorrow, assuming no shocks premarket, bulls have a chance to continue with the work they started today. Shorts covering will drive the early action, but as highs are approached, fresh buyers will emerge.
You've now read my opinion, next read Douglas' and Jani's.
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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com, and Product Development Manager for ActivateClients.com. I do a weekly broadcast on Friday's at 13:30 GMT for Tradercast, covering indices, FX and gold, silver and oil - all are welcome! You can read what others are saying about Zignals on Investimonials.com.
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