MLS Chart, page-372

Will we have the technical bounce soon?

Yes MLS gained 2 pips to finish on 4.4c. The volume today was average of recent times, just over 4.5m shares traded. Today I picked up a few MLS at 4.4c.

ASX Li stocks broke the recent decline pattern and had a positive day. Of the 54 stocks that I track, average gain was 3%.

Overnight US Li stocks were also in the green even though the indices were red - good decoupling there. Average gain across US Li stocks was around 2% - so we did slightly better than them.

What next -

Yesterday again the SP 500 did not go below June low of 3636, rebounded from 3644, but did a lower low which is considered bearish. The indices again had a decent decline of around 1%. Surprisingly ASX indices stayed in green all day. After a long time, ASX did not replicate US markets overnight. Was it in anticipation of a green US markets tonight?

Yesterday I wrote this and it still stands for today:

Overall my feel of what analysts are feeling at this stage:

• There is a chance of a technical rebound. What analysts are not sure of if that will happen now or before we go a bit further down and rebound - but many feel its on the cards. If we rebound from here, the first resistance is shortly around SP 500 level of around 3740. A record level of Puts in Place (Shorting), sometimes markets want to go against the obvious and what every body is doing.
• Many other analysts feel that there is a chance SP 500 will go below June bottom of 3636. The number many feel we could reach shortly and possibly rebound is around 3500/3520. This is roughly further 5% down from here.
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After yesterday's trading where SP 500 June bottom of 3636 was again not breached, there is now a 50/50 chance that we may see a technical rebounce from this level. It may represent a formation of a W pattern (2 bottoms). But still 50/50 chance only, equal chance that it goes down and tests 3500 level. Also, many feel that this technical bounce may not be the final reversal. Sometime in October, many feel we may do our final bottom and then a rally towards election and Christmas - that is still considered a good path. Many bears have a bad path, lets hope we don't go there.
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The bear signals continued to march yesterday - 10 year yield gaining around 5%, Dollar strengthening further to multi year highs around 114 and Volatility Index VIX in major danger zone finishing at 32.26. Anything above 35 will be very bearish and over 40 is considered capitulation and possible bottom - lets see tonight.

Personally I have been waiting for a technical rebound to happen. That was supposed to be a trigger for me to pick up some shares. Although market is still very bearish and chances of a technical rebounce from this stage is only 50/50, after lot of thinking and confusion, I decided to buy in today. Of my funds available, I used around 40% of my funds, so it was a big buy of around 20-25 stocks. I am thinking if we go down further, I may lose another 5 to 10%, but in a rebounce chance of a 20 to 30% gain is there initially and if run continues I could continue holding - hence took a punt. I may have made a bad call and request each to their own research as markets are still very volatile and bearish.
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So what will happen tonight?
US Futures are in decent green at this stage - but they were green yesterday as well but markets finished in red. Asian markets were mixed - both red and green, so no clear direction. As I mentioned yesterday, although stock market was down, but Cryptos had maintained their level and not fallen accordingly in last few days. For last few months there was lot of synergy between Cryptos and stock markets, many considering Cryptos to make a first move - positive/negative before stocks, hence I have been writing about them in my posts to get direction. First time some divergence is happening. In last 24 hrs, they are doing a runner gaining over 8% - Bitcoin at 20.2k, has gone above 20k after some time. Either they are expecting a bounce as well which we may see in stocks, or they are slightly now decoupling - lets see.

Powell to speak in some meeting today before market opens - he can definetly provide direction. Some other data around goods, house sales etc. After 5 red days in US markets, charts are calling for a bounce, probability is calling for a green day. Will that happen? Lets hope so. All the best.