Thursday, March 5, 2009

Quick Look at the Indices - Yesterday Could Be Another One-Day Bounce

Just wanted to show a quick look at the indices. I found it interesting that the bounce got rejected right at the bottom of the channel it broke below on Tuesday. This occured on both the Nasdaq and S&P. I put some other levels to watch if we somehow keep bouncing, but futures are down right now so this may be another one-day wonder.

S&P 500
NasdaqCharts from Telechart2007, Courtesy of Worden Brothers, Inc.

Once again, what we want to look for in a tradeable, sound bounce is a big move lower with some sense of panic followed by tremendous buying off that big move lower. Yesterday's bounce was weak in a number of ways, but the main one is when you compare it to the losses of the previous days. It just wasn't very impressive. I've been saying that these one-day bounces are really negative and that holds true now. We worked off a little of the oversold conditions yesterday and now have more room to move lower. Great. Bottom line is be careful here and don't try to "catch" this bottom because you could get into trouble. I don't know if I will be doing anything today, but if I do, it will be from the short side. Good luck and look out for that jobs number tomorrow.

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