Dead Cat Bounce?

Not much to talk about as the market has been almost uneventful, especially based on closing prices. Despite closing in the green for 3 days, the SPX Cash Index is only up 10 points. The setup was pretty bullish 2 days ago but the longer it takes to develop a bounce higher the less time I give the bulls to try to recover old bullish optimism before fear begins to take over. We attempted to rally today however we gave up just about all of the gains in the indexes by the end of the day. The /NQ made it up to its 38.2% retracement which is typically a minimum target for a bounce, before it sold off. As we speak the SPX futures are down 4 points, despite Cisco's earning suprise, already giving back almost half of the bounce we've seen since Monday.

Short Term Trend: Down
Intermediate Trend: Up
Long Term Trend: Down


I still believe the short term trend is down, but will be broken if we see a pretty decent sized rally tomorrow. The intermediate term trend as indicated by the blue line in the chart above is still up until that line breaks. I believe thats the only thing holding up the market right now in hopes for the continued bounce pattern that had been occurring. However unlike our previous bounces we have sold off on our rally attempt. I believe this has occurred because the long term trend is now down as indicated by the red trendline. I should have a more exciting update tomorrow.

Market Update: A Look at the Nasdaq Futures

Apple came out with a ~21% surprise in earnings, enough to push it to all time new highs. As if the stock going from $78.2 to $192.32 wasn't enough to say that Apple will have great earnings, wall streets love child is now pushing levels above $202 after hours.

The chart above is the Nasdaq 100 Futures Contract. I've highlighted where the Fibonacci retracements have served as resistance and support in the past. In fact this looks a lot better than the S&P's retracement levels. I'm also not a fan of using the same indicators as everyone else as I do not believe the market plays in the favor of the majority. With that said I've already made it known that the 61.8% retracement is my next target for the market. When I originally calculated corresponding target prices, this coincided with 1098 S&P, however the Nasdaq has lagged the S&P since and allowed the S&P to surpass these levels.

There is plenty of other resistance overhead, but this one will be key to watch. Tomorrow should be good day in the markets as S&P futures are up 0.41% at time of writing. However a gap up and a close below the open is a very bearish sign. Lets see what happens tomorrow, it should be very interesting.