OIL seems to be gathering some momentum recently, most probably due to the tensions in Syria but we may be able to take advantage here and together it with a nice double bottom that has formed off the lows in August. I think we get a short term bounce here while all this shit resolves itself.
AKAM dipped below a critical support area around here at 56 – 56.50 and had a small bounce back. If this does not hold, it could easily move down to the 52 area which is the next major area of support.
Lets take a quick look at the SPY chart which reflects the S&P500 index below. The SPY closed right around that 197 support area after the 2 day massive selloff. This may provide some support for the markets and we may see a bounce Monday.
Here is a closer look at the Nasdaq dip (QQQ’s) – It breached below the 104.50 support area and kept going on extremely higher volume.
Below are a few overbought / oversold indicators that can be used for market breadth and overall sentiment. Most, if not all of them are indicating there should be a short term bounce in the very near future.
Percent of NYSE stocks above the 50MA – As it sits now, there are roughly 19% of stocks that are above their 50MA after the recent sell off. If we are to assume past movement would indicate future action, stocks are due for a bounce at this area.
NYSE Bullish Percent Index – Pointing to a bounce soon
NYSE New Highs / New Lows Index – Also at its lowest level in years
VIX Volatility Index – Measures the fear in the market. When the VIX spikes to these levels, it indicates there is extreme panic and the VIX is set to normalize soon which results in an upswing in stock prices.
Percent of NYSE Stocks above the 200MA – Another indicator at its lowest levels in years.
NASDAQ McClellan Oscillator – Overbought / Oversold index (One of my Faves) – Market set to rebound when at these levels
Percent of NASDAQ stocks above 50MA – similar to that of the NYSE but NASDAQ Stocks
NASDAQ New Highs / New Lows – Currently at the same levels of the last big pullback we had in October 2014. Indicative of a short term market bounce.
Disclosure: Currently long Calls in NFLX, QQQ and AAPL
The S&P Futures were down big during the night but held support and bounced back.