Have Stocks Bottomed??
Stocks dumped yesterday as we anticipated in the reports. Yesterday morning, we saw a small bounce from the S&P 500 apparently attempting to test the mid 4400 handle, but this was attempt was swiftly batted down in a persistent selloff that lasted most of the day. At the end of the day, we saw a sharp buyback, which could have been a gamma squeeze as puts were piling into the order books. The sharp short squeeze erased all of our losses with some stock indexes ending the day in the green. Currently, we edged lower, as the markets equilibrate from the selloff and subsequent rally. We appear to be getting support from 4327 and resistance from 4389 at the moment. If we continue to press higher, we could see an inverse head and shoulders pattern with a neckline at 4409 or 4440. A breakout from there could test 4487, or 4580. If things take a turn for the worse, then 4245 should provide support, but if not 4188 and 4178 are the first levels in the 4100 handle.
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