Nasdaq Comp
Dow
Sp'daily5
Summary
So, what to make of today, not least the closing hour? Well, the closing ramp is certainly something we've all seen hundreds of times in the past few years. Partly it was cyclical, we were due a minor bounce on the hourly cycle, but as we crawled higher, it looked like a short-stop cascade upward occurred.
The daily charts look a little scary from the bearish perspective. We have some very possible spiky-floor candles, especially clear on the SP' daily chart. Such spikes are often a sign of at least a short term low, and are often a good turn indicator.
The levels are clear...
Bulls need to break new index highs, sp >1474, with the bears needing to take out the very important 1397 low. With the VIX closing lower, the bulls are attempting to seize back control after last Friday's rout.
Considering the manner in which we closed, it would be very likely we'll open Tuesday at least moderately higher, perhaps into the low 1440s. Yet, that is less than 3% from the index highs, urghhh !
So, best guess, we open higher, but close Tuesday lower. Taking out today's low will be very difficult, not least if are trading in the sp'1440s tomorrow morning. It will be an important battle tomorrow, the winner will very likely determine whether we end October >1490..or close in the mid 1300s. That is a stark price range to keep in mind this week.
Also keep in mind that today, we did take out the recent 1425 low, and took out the big Nasdaq '3000 level. Bears broke a few levels, but they really need to show some power later tomorrow or Wednesday.
Both the daily and weekly trends are pointing down, but the bears must keep pushing lower. Until we put in a few daily closes <1397, the bears should not have any confidence of 'major downside' into year end.
A little more later