Yesterday, the Bear "Knocked Out" the Bull cold, but today the Bear only squeaked by with a few point victory.
Tomorrow morning we get the Initial Claims and Continuing Claims numbers at 8:30 am EST, before the bell. What will they be? Will the government continue to use their magic eraser to make the numbers look more positive to the market?
Or, will they actually release the "real" numbers and cause more selling in the market? It's clear too me that they plan on taking it down to our fake print number of Dow 10,000... which will probably be about 1055 spx. But, that doesn't mean it will go straight down. There will be bounces along the way, as they'll need to squeeze out some of the shorts before the final sell off.
So where does the market bounce at? Will it be at 115.00 spy, or the next support level of 113.00? Maybe those levels will only produce intraday bounces, and the only major bounce will be at the 200 dma? Most all traders know that any moving average that the market hasn't hit in a long time, will be good for a solid bounce.
Well, the 200 dma hasn't been hit in a very long time. You can be sure that a bounce will occur there, and it should be a multi-day bounce. Currently the 200 dma is at 1094.07, and rising every day. It should be just under 1100 within the next week or so.
So, if the market doesn't sell off anymore tomorrow or Friday, then it's going down hard next week. Two more days of wild swings like today, only to put in a candle bar of indecision at the close of each day, will be the makings of a beautiful bear flag pattern on the daily chart.
That could lead to one really nasty sell off on Monday, if it plays out that way? You know how the government likes to mix in really positive news with the really negative news... confusing both bulls and bears. That's why you could see a swing higher tomorrow, and then another swing lower... only to end the day looking like today did.
It could look exactly like January 25th (compared to today), the 26th, and the 27th (which would be like this coming Friday). If it plays out like that, then Monday is going to be ugly! I don't know if it will or not, but I'm staying short for now.
I've changed my mind about going long at 115.00, as I would just feel more comfortable staying short until will hit the 200 dma. Then I might go long for a few days swing trade, and finally get back short again, looking for the final low around 1055 spx.
So for tomorrow... it's a wild card! Being short I could get squeezed a little tomorrow, but I'm riding it out... as this ship is sinking, she just doesn't know it yet. She could just drop another 200 point tomorrow? There was a nice bear flag formed on the 10 minute charts today... meaning that it should sell off in the morning. But, it could rally back up by the end of the day, as it's just a guessing game at this point...