The SP500 held above the 2800/2820 level. While I have mentioned that I am bearish from a fundamental point of view, I do not see technicals confirming that fundamental view.... at least not yet until we see 2800 crack and the weekly breaking and closing below its 50d moving average on a sustained basis... If such an event comes to past, there are ways to play it - short the break or wait for a retest and failure to initiate a new short.
Again, I would not want to be carried away by the current bearishness for reasons I mentioned last night. The price action also does validate my views to be more conservative - we have a close that bounced above the lows just off the 2800. The volume transacted last night was higher than the past 7 sessions but as with a bottoming tail, it does suggest good buyers supporting the market below. So unless we have a catalyst for this 2800 break.... bears may just be banging their heads against a wall. I may be wrong but look at SPY... the volume transacted last night was double the prior 2 sessions! (There is selling but there is also some hidden buying from high volume)The last 2 hours of trading attracted good buying volume. All this just tells me that there is demand at the key support level. And after the market tests the downside, would it then try to test the topside resistance again? All these fits my view that we see sideways for awhile until we have a new catalyst..... if it is from China, then it can potentially cut both ways - if the Chinese's retaliation is less severe than expected and leaves the door open for more talks, we may yet see another relief rally. On the other hand, a move that demonstrates no recourse may be that reason to break 2800.
The way I may play this current state would be to take partial profits on shorts, or turn tactical intraday long just for tonight's session (some short covering ahead of the weekend makes this a possible play)
