Today, the market gave us a dead cat bounce rally. The SP500 opened with a gain of more than 4% and with more than 2000 advancing issues over the declining issues, and the up volume was leading the down volume. This lasted until the last hour of trading when the market gave up all its gains and ended the session with a loss.
The SP500 was up more than 80 points at the high of the day. But at the end of the session, it closed near yesterday’s low at 1867.61 with a loss of -25.60 or -1.25%. The December 16, 2014 close at 1972.56 remains to be the near term resistance and the October 15, 2014 low of 1820.66 or the close at 1862.49 could be the potential support level.
SPX
(click on the chart to enlarge)
The SPY essentially followed the SPX and close with a loss of -2.28 or -1.20% at 187.27. The 197.91 remains to be the resistance level and the 181.92 is the potential support level.
SPY
The Nasdaq 100 was up more than 168 points at the high of the day. Similar to the other market indexes, it also gave back all its earlier gains and ended the session with a loss of -22.28 or -0.55% at 4016.32. The 3/11/15 close and the 1/23/15 close remain to be the potential resistance levels and the October 16, 2014 close is the potential support.
NDX
The Russell 2000 closed with a new corrective low. It closed below yesterday’s low at 1104.10, a loss of -7.60 or -0.68%. On the surface, it appears it did fairly well. But it one inspect further, this index still have a long way to go before it can find potential support from the October 13, 2014 close at 1049.30. It came close to the December 16, 2014 close on the intraday, but the February 2, 2015 close at 1175.51 remains to be the resistance.
RUT
Oversold or dead cat bounce rally is always frustrating to the anxious and despaired longs. The gains from the rally can quickly disappear, and the rally can last as long as a few days or as short as a few hours like the one from today. One should remain cautious and be suspicious of all rallies until the market had capitulated. As always, cash is a position.
