The reason for the move was the pullback in the 10Y rates in an oversold market. Hence, this could and is probably just a short squeeze.
However, we can see below that in theory, actual comparative valuations could push the $SPX between $3900 and $4000, which can be qualified as a possible decent bounce.
The NHNL indicator also shows a higher low, BUT it is still in the Red here. This indicator should move back in positive territory for at least some days in order to support higher prices.
As a matter of fact, there are however quite a few sectors that do not seem to be attracting money here. the NQ8/ARKK groups of stocks are two of them, whose respective weakness is probably due to the TSLA pullback of yesterday.
There were however quite a few other sectors that displayed weakness yesterday:
Conclusions:
Although the current bounce has probably a few days to run, the underlying buying activity is not that strong yet.
Below are trade ideas that look interesting.
