Trilling Thursday – Bouncy Markets Face a Test into the Weekend

We are hitting our goals.

The Dow is over the strong bounce line at 25,500 by 160 points (at 200 points it's a 50% recovery), the S&P 500 is right at the strong bounce line of 2,830 and Futures indicated 5 points higher, the Nasdaq 100 is right at it's weak bounce line at 7,250 and the Russell is right at the strong bounce line at 1,510.  With 3 indexes over the bounce line we like to go long on the laggard so this morning's Futures Trade Idea is to go long the Nasdaq over the 7,250 line – with tight stops below OR short the Dow (as it's the over-achiever) if the others fail their lines and the Dow fails 25,600 – with tight stops above.  

That way, we can make nice money in either direction while we watch and wait to see which way our bounce lines resolve themselves (which then informs us whether to get more bullish or bearish into the weekend):

  • Dow 26,700 to 24,700 is 2,000 so huge 400-point bounces to 25,100 (weak) and 25,500 (strong)
  • S&P 2,950 to 2,750 is 200 so 40-point bounces (or what I said above) to 2,790 and 2,830
  • Nasdaq 7,850 to 7,100 is 750 so 150-point bounces to 7,250 and 7,400

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