Has the reversal on SP 500 started?Yes ESS remained flat to...

Has the reversal on SP 500 started?

Yes ESS remained flat to finish at 40.5c. Our volume was on the lower side, just over 900k shares traded. Good to stay above 40c otherwise a touch of 38c is possible, hopefully we have dodged it if we get some green tonight.

ASX Li stocks were very mixed - some holding the ground others sliding slightly, but overall flat. Of the 54 stocks that I track, there was no gain or loss.

Overnight US Li stocks were weak and average loss was around 2%.

What next:

So first significant decline in nearly 2 weeks on SP 500. Dropped close to 1.5% , finishing at 3963. ASX though did not buy the drop, it was in green whole day and finished around 0.33%. Looks like the rise in Asian stocks which fell yesterday boosted ASX as we have lot of trading with them.

SP 500 has now breached the first level 4000. Next is 3900. Failing this will be very bearish but if it rebounds from anything in 3800s it may still be considered an uptrend. For the upside we need to regain 4000 and then fight around 4060 at 200 day moving average. There is still a chance that it may reach there, bears will take victory only after defeating from there, else they may feel any reversal may be short term to test that zone.

The analysts are divided. Many go with price action, so after yesterday's drop they feel the reversal has stopped. But there are still some who feel we will go higher first and then fall, if we have to have a bigger fall. So a very indecisive state.

Lead indicators were again mixed - Dollar index fell, Yields rose and Volatility Index rose. So no clear direction here.

Resource stocks are very tentative and trading pattern points to punters being risk averse. So no strong buying, instead unloading where ever possible. Last few weeks indices rose over 15% or so, but in last week or so most resource stocks have actually lost around 20% - this is worrying. Indices were rising yet stocks were falling. What will happen if indices start falling?

So what will happen tonight? Another unpredictable day. Bears have had first taste of blood in long time. They may want to continue. But with no major dat, China situation and technicals are driving the market. Tomorrow it will be Powell's speech. There is a good chance of a green tonight and an attempt to regain 4000 on SP 500. Will that happen? Lets hope so. All the best.