Today the market made a strong bounce off the morning flush. After all said and done, the DJIA closed with a 3.6 points loss, the SP500 eked out a whopping gain of 1 cent, the Nasdaq 100 regain all its early losses and added 1.13 points, while the star performer of the day, the Russell 2000 added 10.97, approximately 1% gain, and the DJTA added over 66 points.
Although this bounce look impressive and might be tempting to initiate new long positions, there seem to be some mixed signals flashing from today's bounce, and there could be a possibility of a bull trap being set. At this point, it probably would be more appropriate to take the position of rather be wrong than to be long. If one missed this rally back to previous all time high, there still a possibility on capturing at least another 30 SP500 points from the current all time high level. But if one walked into a bull trap, one can incur big losses easily if one is not quick enough to bail out of the positions as soon as a sign of a bull trap appear.
In this video, various levels for the indices are reviewed and identified for monitoring in the near term.
Click here to view the video if you do not see a video player on your screen.
