Market roller coaster day, closed up

q0801.gifIn the stock market today was a day to fasten the seatbelts. The overnight session was down sharply. In mid-morning there was a rebound. Shortly after the open all markets plunged again, then a slow grind up, then another nasty drop. After several up and down moves the market finally started a sustained rally into the last hour and closed strong. It was a great day for day traders, but difficult to figure out for swing traders. The action was so fast today that some data vendors had a difficult time keeping up with quotes, and bar ranges were very wide. It was a fierce battle with the bulls winning, or at least the bears covering. I only included the QQQQ chart today as that is still the only one that looks hopeful. It is still holding the up trending regression channel. Prices probed below the channel and prices were rejected at those levels so far. Lower prices advertised for buyers, and buyers were found. The double stochastic is still oversold, but today’s action put in a slight bend up, with a divergence pattern in the shorter stochastic. I included the three day pivots on this chart, as I prefer to trade on the side of those yellow dots. Prices closed below the dots every day since this selloff began. If prices can take out the three day pivot tomorrow a further bounce would be indicated and will be long calls for a day or two. If this correction is over, it would be unusual for this market to rebound very far without a re-test of the lows. This market seems unusual and anything can happen of course, and looking at the other stock indexes there isn’t much reason to think this correction is anywhere near completed. Rallies should probably be sold at this point, however bounces can be traded on a short term basis. I don’t like to trade against the trend, but an argument can be made for the Qs still being in an uptrend. It’s more difficult to make that case of the other indexes. Gold was down a bit, but nothing new on the charts.

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