The market struggled yesterday and gave back all the premarket rally, and this morning we appear to be close to that level again. I know they are trying to pass a stimulus bill for the virus, which could be a big market mover, but it also could already be priced in as passed.
Meaning it won't have the expected bigger rally from a "yes" vote, and of course if it's a "no" vote then look out below. Lets face it here, they are already pumping tons of money into the market right now, so what's the big deal if another pump from the stimulus bill happens? It's not looking likely to have much of an effect on the market. We are still in bounce mode from being so oversold, but I don't think it will last all week.
We'll probably see a bear flag pattern form in the coming days and not as much upside as I'd hoped for unfortunately. When everyone is expecting the same thing odds are greatly against it happening. And a lot of people are looking for a strong bounce to short from, and the market isn't likely going to give it to them.
This premarket rally is likely to get sold again, just like all other moves up have been. I had thought we'd see more on the upside, like maybe a rally up to 2500 at least, or 2700 at best, but it's probably just wishing thinking.
Bears still look like they are in full control here and just letting the extremely oversold short term charts reset before another move down. When? Don't know? But I'd guess within a few days, like maybe by this Thursday or Friday. If it doesn't happen by then, and the bulls hold on to this current low area into next week, then they will have a good shot at a much stronger rally starting.
It's all about "time", as once the short term overbought charts get back to neutral the battle will begin. The bears will roll them back over and try to tank the market much lower again, and the bulls will try to hold the market above its' recent low and allow the charts to get oversold one more time.
That could easily happen into early next week. If the bulls "hold the line" until that time period, then they should be able to rally back up much stronger that second attempt versus this current first attempt. Let's see what they do, go for the touchdown today and/or tomorrow (which will result in a fumble as the bears will sell any bounce now), or run the ball down the field some and turn it over to the bears so they can work on defense until they get a better odds run for a touchdown the next time around.