Market Recap For 8/5/2015

After yesterday close, the market logged in a three consecutive down days and alerted us to watch for possible dead cat bounce. To no surprise, the market opened up today. But the rally was short lived. The market reached its high of the day after the first hour of trading, and then it started to fade. By early afternoon, the market gave back most of the day’s gains. Two hours before the market close, it mounted a feeble rally but the sellers took control and closed the market on a down note.

The SPX closed near the Fibonacci 61.8% retracement level at 2099.84, a gain of 6.52 or +0.31%. It did spike above the 2108.86 resistance level but was unable to hold above this level. The SPX ended the session with an inverted hammer candle. The scenario for tomorrow is the SPX could make another attempt to move above 2108.86 or come down and test the 50% retracement level near 2090, or it can do both.

SPX

(click on the chart to enlarge)



The NDX closed at 4602.24 with a gain of 34.77 or +0.76%. It was the top performer today. It raced up toward the 7/22/15 gap before it retraced back toward its opening print. Today’s price action from the NDX also resulted with an inverted hammer like candle. The scenario for tomorrow is it could retest today’s low with the possibly that it could fill today’s open gap, then follow by a bounce to today’s high with the possibly take out today’s high.

NDX




The RUT closed with a modest gain of 2.91 or +0.24% at 1231.75. It almost filled today’s open price gap. The price could be bounded between the 1238.76 resistance and the ‘H’ pattern baseline at 1226.

RUT



The market is still in a choppy mode. Until it has decided which direction it will take, one should remain cautious and cash is a position. In this environment, one must be quick and decisive as price movements are fast and short, ideal environment for the day traders.