We just finished three hours of short-covering. The market managed to tuck up into the monthly open around 4408, near the 21-day line and slightly above yesterday’s RTH low. Unsurprisingly, this is now resistance and will take some time to conquer if we are headed back north again.
The remainder of the day will tell us whether the market can find acceptance or needs to roll back down and retest the lows. The “ABC” nature of the short-covering rally makes it look corrective to the downtrend underway rather than the first rally in a new leg up.
Let’s see how the rest of the day goes. If you followed the Pre-Market Outlook, you should have more than enough gains to take the rest of the day off.
A.F. Thornton