Trader's Daily Notebook: Sorry for the Buzzkill, But It Was Just a Bounce

Tuesday's bounce in equity markets met the expectations of many traders. In that morning's Trader's Daily Notebook, we discussed the idea that shorter timeframe traders would likely be stalking one- to two-day bounces in names that were still holding above recent support levels or higher timeframe moving averages (MA). And most stocks did manage to bounce. Unfortunately, and I know I'll be labeled a killjoy for saying this, I believe it's premature to assume Tuesday's rally is anything more than an oversold bounce.

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I like a tradable bounce as much as the next short-term trader. And closing back above the 50-day MA is unquestionably a bullish development. But until the E-Mini S&P 500 futures (Es) recapture the 20-day MA over a multisession period, my inclination is to remain defensive and closely monitor opportunities to sell the market short in and around the low 2460s....379 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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