With the holiday on Monday, we expect a pullback in the Tuesday – Wednesday time frame. So we if we gap up on Tuesday, this may be a quick short entry for us.
As we mentioned last week we were in the process of testing the January low. We broke the low by 2 points in the premarket on Thursday and rallied into the close on Friday. It is possible that we are putting in a double bottom, however, we need to see a statement bar like we saw after the September lows. Without such a bar this pattern may turn out to be a trap. If we see such a bar and bulls are able to break 195-196, we are looking at a 210 target. If bulls fail, we could see the bottom fall out pretty quickly with 175 being the first target.
Long-Term Market Outlook (Updated 2/14/16)
This week the the focus will be on the FOMC minutes and EIA Petroleum reports. All the volatility in oil will continue to spill over into the equities market.
Trend Following Models:
My long term models are Bullish (warning issued).
My medium term models are Mixed.
My short term models are turning Bullish.