Turnaround Tuesday – Markets Pop Back Just Because

No, nothing happened.  

Still, we’re up 0.6% pre-market across the board and we’re just waiting to see if the Russell can get back over it’s Strong Bounce Line at 1,532 to confirm the bullish action of the rest of the indexes.  As I mentioned in yesterday morning’s PSW Report, we were playing for the bounces off “Dow (/YM) 25,300, S&P (/ES) 2,800, Nasdaq (/NQ) 7,300 and Russell (/RTY) 1,500” and in our Live Member Chat Room, at 9:51, I put up the following note to our Members:

Good morning!

Big Chart not bad, only the RUT failed the 200 dma (and the 50) so we need to see 1,523 come back and the rest is just normal bouncing which would be:

Dow 26,000 to 25,400 is 600 points so 120-point bounces to 25,520 (weak) and 25,640 (strong)

• S&P 2,860 to 2,790 is 70 points so 14-point bounces to 2,804 and 2,818

• Nas 7,525 to 7,300 is 225 so 45-point bounces to 7,345 and 7,370 

• Russell 1,580 to 1,500 is 80 points so 16-point bounces to 1,516 and 1,532 

As you can see, we made a nice entry into the 10 am dip and caught that great upswing that gave us weak bounces across the board and stopped out when the strong bounces failed but then got another shot to get in in the afternoon and now we’ve flown up to our strong bounce levels, which hopefull won’t be rejected today so we can get back to playing the market (we’ve been watching and waiting since last week, for the most part).  

There’s no particular news or data moving us higher – just the lack of bad news, I suppose.  As you can see, the VIX is still elevated so someone is worried about something but we’ve learned not to fight the tape so we’ll simply use the VIX falling below 15 as an all-clear sign to get more bullish (assuming it happens).

Boeing (BA) is bouncing back and that’s helping and Apple (AAPL) just announced a whole bunch of service products and they are back over $191 this morning so that alone (1.5%) is enough to move the entire Nasdaq up 0.3% so half the rally is Apple, half is Boeing and the other half will have to come from the other 6,000 companies – which is why we’re very interested in the Russell 2000 today.

The Russell was the canary in the coal mine earlier in the month, that warned us not to get to bullish so we’ll see what it has to say about this new bounce pattern.  Meanwhile, Oil (/CL) is testing $60 again and that’s a very good shorting line with very tight stops above.  Gasoline (/RB) is $1.96, not as good of a line but way too high with Easter still a month away.  Natural Gas (/NG) is a relative bargain at $2.74 but we like the October contracts (/NGV19) at $2.90 so we can ride them into hurricane season if the demand doesn’t get us there first.  

IN PROGRESS

Provided courtesy of Phil’s Stock World.