Friday's bearish doji had the natural look of a swing high for a bear bounce given the midline tag for stochastics and 20-day MA resistance - but this wasn't the case. In the end, it was another solid day of buying, bringing indices back to Thursday's highs. However, despite today's gains, buying volume was light and technicals remain mixed. For the S&P, despite the lighter volume there was enough volume to reverse the 'sell' trigger in On-Balance-Volume.

Friday saw the return of sellers which left many of the lead indices with bearish inside doji; this pattern is typically viewed as bearish when momentum indicators like Stochastics and RSI are overbought, but in the midst of this bear market, the mid-line of Stochastics is seen as overbought, and this is where we are now. In addition to this, many indices are also up against 20-day MA resistance. We are seeking a point where the bounce loses the momentum it had as it faces overhead supply from panicked, and loss-holding, bulls. The only positive from Friday was the lighter volume on the selling. For the S&P, this convergence of bearishness has also come with a bearish cross in 'On-Balance-Volume', but still has the MACD trigger 'buy'.The question is whether this will in fact be a swing high reversal, or will the index continue higher - looking at the 50-day MA as the next supply, reversal zone.

Another day of gains has effectively confirmed the first swing low, so now we await the retest. Indices are quickly coming up against moving average resistance which is the first test of them. The S&P is about to tag the 20-day MA on a MACD and On-Balance-Volume trigger 'buy'. While I'm looking for an eventual retest of 2,191 it doesn't mean the rally will be cut short soon. There is a sizable gap between the 20-day and 50-day MAs, which in itself is a possible trade opportunity, but it's hard to see this rally making it that far.

It looks like we are in the process of the initial bounce, but it's a bounce which typically forces 'weak hand' buyers to panic themselves into positions; these buyers will quickly sell when markets start to retest Monday's lows. But, it's a start. We - and America in particular - is a long way from the end of the Covid rampage. When death and infection rates pick up we are going to see markets weaken and then we will be looking at lows, or maybe new lows. On the plus side, trading volume was higher in accumulation. The S&P improvements are working against a relative performance drop against the Russell 2000. Technicals remain weak and show no divergences. 

While the S&P took another, smaller, step lower. Both the Nasdaq and Russell 2000 seem to have stabilized around last week's trading range. Today's volume was lighter than Friday but remained very heavy overall. Traders willing to use the current low as a risk measure may find enough room for a relief-rally trade, but it won't be one for the feint of heart, and could easily be stopped out tomorrow. In the case of the Russell 2000 ETF, $IWM, the trade stop is below $95.69, but with an ATR of 7.84 you would ideally be looking at a stop closer to $83s to allow for volatility - making the typical risk:reward worthless. So, with that caveat, buyers want to be close to the exit button.

Wednesday had offered the opportunity for the start of a swing low following a 'bullish' hammer in the S&P, but there were more indecisive candlesticks in the Nasdaq and Russell 2000, and with Friday's selling coming on the back of higher volume - although this coincided with a Triple witch for options expiration - undermined any possible demand mid-week action could have hinted at. Markets are again in a situation seeking a low, and with key indices finishing near the week's lows (likely awaiting news over the weekend), the chance for yet another gap down tomorrow looks high.  What will be important will be the selling volume - we want to see some exhaustion (light volume) on down days, followed by higher volume buying on days markets are able to close higher. The S&P looks like it will gap down tomorrow; failed 'bullish hammer's have a nasty habit of trying to seek new lows. The only thing 'to like' here is the relative underperformance aga...

We are still in a hunt for a low but there is evidence that markets are finding some consolidation around recent price action - even if the range from high to low for this range is around 10%. The S&P finished with a bullish hammer on Wednesday on a high volume day, today was more of an indecisive 'spinning top' on lighter volume. The S&P is trading 20% below its 200-day MA but a bounce is needed; however, nobody knows when this bounce will emerge. Technicals are not offering much guidance yet.

Markets continued their downward leg in an attempt to an establish a low. For example, the Russell 2000 has already given up 35% from its highs and today's candlestick didn't suggest a capitulation (it looked better on Friday). For many of the indices there are no developing divergences to work with and there hasn't been any semblance of a bounce to establish a sideways consolidation of losses, so we are still looking for a swing low to work off. The S&P did register as an accumulation day and managed a reversal of yesterday's losses, but aside of that there wasn't much more to say.  The S&P has comfortably surpassed the 5% zone of historic weak action, but to hit the 1% zone would require a tag of 2,223.

It has been so long since we have made trading days like the ones we have had the past couple of weeks. Friday was no exception as markets posted 6-9% day gains following comparable losses the day before. One only has to look at the price congestion from earlier in the year and the latter part of 2019 to see how weeks worth of action is now playing out in the course of one day. Nobody knows to what extent Covid 19 will hit this year's earnings, or what the long term effects on consumer demand, supply chain security, and the gig economy will be, but as an acute infection with a relatively low mortality rate (thankfully, this is not Ebola), the recovery should work through quick enough. Aside from the morbidity factors of the disease, the impacts on loss of earnings for gig economy workers will be significant and it will be interesting to see what (if any?) changes are made in the employment conditions for such workers and other vulnerable employees in scenarios like these.  And much...

While Presidents typically have little influence in the direct moves in the market - today's loss was pretty much all his. Instead of inspiring some level of confidence, markets spun off in the other direction.  For the Russell 2000, this means in the space of a few weeks the index has plunged to a level last see in June 2017. The damage in the S&P and Nasdaq was not as bad, although still not great, but their respective 2018 lows are still intact. The S&P is currently 18% below its 200-day MA and has pushed into the 5% zone of historic weak price action, last seen in December 2018.  The Russell 2000 is now 27.8% below its 200-day MA, which is well beyond the 1% zone of historic weak action since 1987 (21% below its 200-day MA); while this market may slink or continue to crash lower, we are likely close to a swing low - certainly investors should be fishing for opportunities in Small Caps. The Nasdaq is the most 'resilient' of the indices but now finds itself 14% ...

Markets are still working through their declines as they seek a point of seller's exhaustion. The Russell 2000, as the index of speculative stocks, is the one to watch for leads. Today's 6%+ loss undercut the prior low and left the index grasping for a low. On the plus side, selling volume was lighter than yesterday's buying volume and the index is now 19% away from its 200-day MA; if it gets to 21% - which could happen tomorrow - it would leave it in the 1% zone of historic weak action and should be considered an incredible buying opportunity for investors with a multi-year time frame; even now, it has already surpassed the 5% zone, and investors should be active accumulating Small Cap stocks. Short term traders may also reap benefits if they have the stomach for the volatility.

Another big hit to markets spent markets spinning lower. The Russell 2000 took the worst of it with a 9.7% loss, closing at the low of the day on higher volume distribution. The loss has been so strong and so quick it has moved down to the 5% zone of historically weak action dating back to 1987; this is a 'buy' zone opportunity, although I would like to see some stability in price action before confirming this as swing low. However, if you are investor with a long term window, now is a time to be building up a position.

The bounce has stalled and now it's a question as to whether the swing low from February is one to be defended, or is simply a swing low in a measured move lower; a move which could see 2018 lows tested - although this would be a big stretch and a likely 'worse case' scenario. Again, just to reiterate, the 2009 low is a generational (55 year+) low and the rally which emerged is one which will see long (long) term gains. This is a sharp move down, but it won't last. Markets may move sideways for an extended period, which will 'feel bad' but is ideal for those looking to accumulate a position over time - such as in a pension or 401K. With that in mind, we have to deal with the present. The Coronavirus is here to stay (where are the anti-Vaxxers now...). We have a Chinese economy which is still trying to come to terms with the infection and the eventual economic fall out. We have a UK and US economy led by the most incompetent group of 'leaders' for whom ...

Yesterday's return to selling had the look of a tiring bounce, but this was swiftly undone by today's buying. Market rallies are still in play with 20-day and 50-day MAs as overhead resistance. The S&P rally is aiming towards converged 20-day and 50-day MAs, although buying volume is lighter than recent selling. Technicals are all net bearish, not surprisingly, so we will be looking for bullish divergences when traders eventually return to selling

These big reaction moves always seem to happen when I'm afk. Anyway, markets are attempting to price what impact the Coronoavirus will have in both the short term and long term, but after 10% declines we now have the dead cat bounce effect. I don't expect the bounce to last with a retest of recent lows likely, but this test could evolve into a slow decline - with buyers reluctant to step in until the impact of world events can be priced in, which is easily a few months away and potentially longer.  If you are looking for an exit, then the next couple of days could be critical. It's hard to see indices make it back to multiyear highs without a containment in the Coronavirus outbreak, so today's bounce seems artificial. The Dow Jones Index added 5% as it accelerates toward its 200-day MA on net bearish technicals. Relative performance remains poor (vs the Nasdaq 100) and until there is a relative advantage it's hard to see it sustaining a strong run higher.