As expected last week I mentioned that a market bounce were VERY likely to occur , in the zone of 1590-1600.
The market bottomed this week with a very close gap fill at 1600 area.
All the times NYMO got to these extreme levels we saw it was a good time to buy short term , and this gave a result in a big 1-2 day rally end of week (starting Thursday).
I took off all my shorts at 1600 on SPX with great gains and went long stocks so it fit perfect with the last rally we saw.
For now I’m thinking we get a “bounce” , not to new all time highs again – but I think we will have a “test” of the resent highs. Probably around 1670-1680 area likely.
I remain only long few small cap stocks currently and will start to grab shorts back if we see a re-test of the highs.
Conclusion:
All in all – I think we will only get a re-test of highs , but on the other hand I wont rule out a test of 1700 if we should make new highs. I will monitor closely the market action coming weeks , but currently I think this rebound have more upside to go.
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