In my January 23rd post, Charts for the Big Bounce I put up a number of indices, S&P500, Eurostoxx 50, DAX, Shanghai Composite and the Nikkei. The bounce did indeed occur and it was ‘big’… relatively speaking. The move higher lasted for several days and resulted in several failed attempts to break out. Volume on up days was anemic to say the least. Buying power came from shorts covering, rather than from longs establishing new positions.
The bounce is now over. A test of the lows is now likely. I do not expect the lows to hold. The Yen has decisively moved higher, signaling continued risk aversion.
Non-Farm Payrolls on Friday could be the catalyst for a catastrophic move down through the lows.
The Financial Ninja is a collection of my thoughts and opinions about current economic and market conditions. These are not buy and sell recommendations. Use your head and do your own research. This is a forum to stimulate discussion and debate.
I started trading during the tech bubble when I was still in high school. My trading has financed my education and I have since completed a BA in Economics and an MBA with a concentration in Finance. I have worked as both a proprietary equity and fixed income derivatives trader.