And just like that, most of the pain from yesterday is gone. The media is calling it another Black Monday, but it was Grey Monday, at worst.
The widespread sell off hit every sector. Nothing was spared. Today's bounce may set up the opportunity to exit some names, or even look short.
Even some of the stronger, more conservative names fell yesterday. Eli Lilly (LLY) was among that group.
A large gap down, which was common everywhere, was met with little bounce comparatively. The stock closed not far off its low and never gave a real shot at filling its gap.
After the July drop, the rise in August looks more like a bear flag now, with a false breakout attached to its end.
There is a double top in place right above $88, although that feels like forever away from the current price.
Neutral and bullish setups in the Relative Strength Index (RSI), moving average convergence divergence (MACD), Ultra Index, and Commodity Channel Index (CCI), have all turned bearish.
While this is common place now on many daily charts, I think it is a good marker to watch what stocks bounce back into resistance today, fail to break through it and do not see at least two indicators get back to a neutral position.
LLY needs to get back over $82 minimum for a somewhat neutral setup, but really needs to be over $83.70 to provide any interest other than exiting or shorting for me.
Ventas (VTR) was strong going into yesterday, even with last week's selloff. The stock fell through two different levels of support, both bullish channel patterns.
The stop has been riding the 10-day simple moving average (SMA), which created the first level of support. The second level, at $58, was also broken.
A third level around the 50-day SMA did come into play around the close of the day, so it is worth watching.
We also saw multiple technical indicators go from bullish to bearish in a single day. The RSI, CCI, Ultra Index and MACD all saw bearish crossovers.
I would pay close attention today and note if they reverse. The other area I am watching is price. A close over $58, but under $59 puts us back in the channel and is somewhat neutral.
A rejection off $59 with a close under $58 should set us up for more downside, especially if we don't see at least two of those indicators flip back in favor of the bulls.
