Whither the Bounce?

 | Apr 11, 2012 | 1:41 PM EDT
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So far this morning's bounce attempt isn't gaining much traction, but we are holding up despite Apple (AAPL) and Priceline (PCLN) seeing some red. Breadth is solid at around 4-to-1 positive and most every major sector except silver and natural gas are in the green.

What it really comes down to on a day like this is whether or not you trust the bounce to continue. That has often been a good bet in this market, but when you have a broken chart and then a low volume, dead-cat bounce it isn't exactly a compelling technical setup.

Many traders have been driven nuts by straight up bounces in this market that never allow for entries. Typically it is the back and forth action after a breakdown that creates a new base of support and makes for good charts but we no longer seem to see that much.

I'm struggling with whether I should expect this bounce to fail or lean toward another v-shaped bounce. A failed bounce makes more sense, but a v-shaped bounce has been far more common.

I'm going to wait to see how we look an hour or so before the close and maybe take a few positions at that point. We are holding up well enough that more buyers may start to inch in but if AAPL rolls over again it is going to slow down the momentum.

Columnist Conversations

volatility is quite low here, and we could see some downsides here in the short term. ...



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