So, we got our "Bounce". Now What?

As I wrote earlier today before markets opened, there was a good chance for a short-term bounce. We have the bounce today for all the major markets including 10 of the 11 SPX sectors. So, what happens now? I do not predict anything. I only look at the probabilities. So, let’s start with the short-term trending.

It’s clear that the short-term trending has improved from the last time I reviewed it. However, the medium-term trending remains bearish.

This situation indicates a potential transition in trending. This could be a bearish to bullish reversal OR it could just be a small bounce in an overall downtrend. There really is no way of knowing.

One thing that indicates there could be more to this bounce is that the RSI indicates oversold levels in the daily period. The other thing is that there is an unfilled gap above from earlier this week and there is a chance the price fills that gap before doing anything else.

Both these things - the oversold level and the gap - are true for all the markets. So, there is consistency there.

The bounce today was quite broad. This is the distribution for all stocks traded in the US (over 9000):

So, we shall see if this bounce has legs or not.