The Nasdaq bounced hard off the monthly chart I posted a few days ago. The bears did their job in holding it down for an uncomfortable amount of time, but the bulls are back in town. Is the bottom in? We’ll have to wait and see. I expect a test of the 20 day moving averages on the major indexes before resuming back down… and oh yes, we’ll be heading back down. This Bullish reprieve will probably be fast and furious in this Bear market, as counter-trend rallies usually are. When you start feeling comfortable it’s going to be time to short. If you missed the first round, get prepared for the second.

GS is on track to trade back over 200, and break through that downtrend line.

Look at that volume in the Bullish ProShares Financial ETF UYG. I’m watching over 38.20 for the next leg up to resistance.

The Nasdaq bounced off the 50 ma on the monthly chart after opening down 119 points. That moving average and trendline support is 22% off the October high. I traded QLD for the bounce, and watched the market trade flat with a few scalps the rest of the day.

GS is trading inside a large channel on the daily chart. It’s still one of my tells for the health of this market. We’ll need trade above that 200 area, and the trendline, before the market can even think about heading higher.

Today’s sustained bounce may have been nothing more than the unwinding of options trades. The next few days should help determine if we’re getting close to a bottom.