The market bounced back Thursday, recovering from two days of selling to take back its 21-day moving average. The Nasdaq was weakest index over the last two days of selling, and today it bounced back the strongest, surging 1.39%. The S&P got as high as 1449, which is the spot markets broke down from on Tuesday. Bears should try to protect this spot. It's been a spirited move that took out yesterday's highs of 1441.
Today's bounce is a welcome sign for those looking for the rally to remain on track. By reclaiming its 21-day MA, it keeps bullish composure intact and reduces the likelihood of a deeper correction. The next key resistance stands at 1460-1463
Banks helped to lead the rally today, as did some tech stocks.
Apple (AAPL) was the most notable trade on my radar today, as it staged a textbook Red Dog Reversal to give us a calculated entry to buy the dip. The beauty of the strategy is that it presents a tight, defined stop-loss point and perhaps large reward in a counter trend move. It was nice to see AAPL repair some of its short term damage, and it should help the market bounce back further as well.
*DISCLOSURES: Scott Redler is long SPY, GS, AAPL, LVS.
- Markets & Exchanges