The indices are up again today but yesterday's very strong momentum has cooled. Many of the big movers are consolidating but breadth is still around 2 to 1 positive. The indices have reversed from the early push higher but unless the S&P 500 tests the opening lows sentiment should remain upbeat.
Some bulls are celebrating the fact that the S&P 500 is back over its 200 day simple moving average for the first time since December 4, 2018, but an argument can be made that this is a contrary indicator. That level is widely watched and may give some folks a false sense of comfort that there is now strong support and less reason to worry. It is the sort of setup that the computer algorithms often try to exploit.
If we see an intraday reversal today and a close at the lows I'll be much more cautious, but I'm going to wait for the price action to shift before I start to worry.
I'm looking at some low priced 'bottom fish' plays today rather than the momentum trades that worked well yesterday. For example China car buying portal, Uxin (UXIN) is turning up, Electrameccanica Vehicles (SOLO) ,which sells 3-wheel electric vehicles, has a big spike in volume, and beaten down Bloom Energy (BE) has an upgrade today from Raymond James.
I'm not doing a lot but there are still some interesting charts developing. The market may need a rest but there are no signs yet of an impending collapse.