It looks like yesterday market overreacted to the Korean news and today probably overreacted to yesterday's overreaction :) Sounds confusing? Well it is! This one of those moments when is hard to make a call. This kind of day to day volatility usually happens before big movements in the stock market. Last time we had something similar was in April. After that once market moved above or bellow SMA 120 it didn't look back.
I still have my bets on bears since today is the fourth unsuccessful attempt to climb above SMA 120 and daily DMI remains a little bit bearish but as you can imagine we are on very thin ice. The only good news today for the bear camp is that the volume was pretty low.
The really bad news for the bear camp is that NASDAQ had a bullish EMAs crossing today! It's not a great crossing but it's there. Nasdaq usually gives a little bit more false buy and sell signals than SPX and that's why I stick with SPX. For example on October 4th Nasdaq gave a false sell signal, but not SPX.
Small caps are also looking bullish, we have a clear EMAs crossing on Russell 2000 and they are barely touching on Russell 3000 but price is a little bit above SMA120.
I wish the picture was much clearer than this but once again we need to wait a little bit longer to see what market decides to. Up or down?
Happy Thanksgiving to those living in US a nice evening for everybody else!