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Bulls Buying The Bounce Offered Little

Courtesy of Declan

Yesterday's recovery set the groundwork for a bounce but the gap higher took away most of the opportunity the bullish set-up offered. Weakness at this point would be bearish so wouldn't be buying but if in then hold until the morning breakout gap closes and reassess.

The S&P generated a small uptick in relative performance but not enough to trigger a 'buy' signal yet. Other technials are mixed with 'buy' signals in the MACD and On-Balance-Volume are offset by 'sell' triggers in +DI/-DI and Stochastics.
 


The Nasdaq kicked off a new bounce with the MACD recovering a little but all other technicals net bearish. Still much work to do with the index trading inside the range.
 

 

The Russell 2000 experienced a modest gain as the bounce develops. The risk:reward is still favourable for bulls with a stop on a loss of 1,539 and an expectation for a break from the triangle and a move higher.
 


The Dow Jones may have laid a preliminary 'bull trap' but the index remains above the downward channel. Volume was light although the 'tweezer low' is still in play. Bulls still have a workable edge here.

 


For tomorrow it will be about building bullish momentum on today's action. The Dow Jones Industrial Average and the Russell 2000 are perhaps best placed for bulls to push their advantage.


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