The market blew through support on Friday and did not look back. It is likely we will have a bounce of some kind early next week. On the hourly chart, the market is still following a very orderly descending channel that it entered into in late February. The market does not appear motivated to break this channel yet.
On the daily chart, the market is at its -3 ATR channel and is ripe for a bounce on this chart as well.
It seems like, at this point, the market has not found a bottom yet. The next level of support is around 6150. That was the high before Trump’s liberation day celebration sent things into a spiral last year. Coincidently (not really), that is also close to the -3 ATR on the weekly chart. That is a pretty healthy support point and I would think bulls will put up a fight there-if it does not recover before then.
Market breadth indicators are all overdone at the moment. A short term bounce still seems likely before any selling would resume.
The net monthly NHNL is below -1000 and in an area where I look for short term reversals:
Same with the net Capitalized NHNL. It is in an area where reversals happen.
One thing I am watching closely is the rolling 52 week NHNL. That is showing signs of slowing down and potentially reversing.
In short, selling pressure still exists. 6150 on the S&P 500 seems like a good area to test support. However, in the short run, the market is oversold and a bounce should happen anytime now. Of course, none of this is a guarantee and the market does not care what I think!
