The bounce is here, but does it have staying power?
That’s the big question after a 3 day free fall to support that was preceded by a historic six month bullish momentum run. As we expected, the market is trying hard to bounce off converging support levels, namely, price action and the 50 day moving average.
While it’s always exciting to see boring indexes like SPY move over 3% in one day, at this point it’s still a feeble attempt to get back some of what it’s lost. Considering SPY was trading at 303.50 last week, the 3% bounce to 280 doesn’t mean much.
The market still has work to do to get back on a momentum trend. Thus, for traders, it’s not giving us any great signal yet. The best thing we can do right now is exercise caution until we get more clues.
That’s what we go over in today’s video. I review the two key signals for entering either long or short and reivew some stocks and sectors that are in play.
— Paul J. Singh (@PaulJSingh) September 9, 2020