Where Will It Stop

After four consecutive down days, the market finally finished in an up day with the SP500 bouncing off the 1040 level, the DJIA bounced off the 10,000 level after it has briefly went below 10,000 during intraday, the DJT bounced off near the 4000 level, the Russell 2000 bounced off near the 590 level, and the Nasdaq 100 bounced off near the 1750 level. With all these market indices bouncing off their intermediate support, does it mean this downward trend has reached its end?

Looking at the technical, today's rally is no more than an oversold rally. I do not believe these support levels will hold. The momentum appears to indicate the market is destine to fall to their June/July 2009 low. In the coming days, the market could continue to rally due to short covering and some short squeeze. After some of the shorts have been taken out, the downtrend will likely resume. In the meantime, I will continue to treat this market as a trader's market with a downside bias.

SP500:



DJIA:



DJT:



Nasdaq 100:



Russell 2000:

Still Trapped

It has been two weeks since I last posted and the market has not broken out in neither direction; up or down. The SP500 along with many of the market indices are still trapped in a trading range. Although the technical indicators are in a slight negative bias, I will continue to take quick trades with reduced size until the SP500 either breaks above the 1130 level or breaks below the 1040 level.

SP500:



Russell 2000:

Getting Ready To Breakout

The Dow Jones Industrial moved above its June high on Monday and it has been able to hold above that level. In the meantime, the SP500 and the Dow Jones Transportation index are approaching their June high. The two lagging indices are the Nasdaq 100 and the Russell 2000. In order for this rally to continue, the SP500 and the DJT need to break above their June high along with the Nasdaq 100 and the Russell 2000. If these indices fail to break above their June high, then look for retracement back to their trendline for support.

Here are the updated charts for the major market indices:

DJIA:




DJT:




SP500:




Nasdaq 100:



Russell 2000:



I have been mildly bullish on the recent price actions and started to nimble on some long setup. I will continue to trade with reduced size until all the indices have broken above their June high with conviction.