After a heavy round of selling I expect to see a bounce and then a compression above the major moving averages. Here's why.
PRE-OPEN MARKET COMMENTS FRIDAY – The market does not go straight down or straight up. After 3 weeks of selling, the S&P 500 found support at the 200-day MA yesterday. The major moving averages have been converging so the 100-day MA so they are all constantly in play. The volume during the decline has been better than average, but we are not seeing any long red candles. Instead, the bodies are tiny and the intraday ranges are compressing. The 20-day ATR was $9 in November and now it is $6. VIX/VXX are relatively low because of the market price action and we have not seen a spike.
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