People, let's not make this bounce any more complicated than it needs to be.
This is an oversold, options expiration related bounce. The targets in addition to Max Pain ought to be the neckline on the SPX H&S, currently around 866 if my memory serves.
A tag of this neckline, if it happens, ought to end this bounce and reverse the index back down. The COMP neckline is at about 1337, I believe, but the COMP could be subordinate to the SPX in this test.
I believe the COMP may overshoot the 1337 level and test the 1362 pivot high.
SPX 866 is about 3.5% above Friday's close. When the SPX moves up 3.5%, the NDX moves up about 5%. That would put the NDX at around 1030, nearly 50 points above Friday's close. I'd say a range of 1025-1040 would be a good range to work with, with a bias to the high side for Fib reasons and gap resistance.
1025-1040 is about 1360-1375 COMP.
This test could take another 5-7 sessions and last through the end of February. It could also be finished this week. We'll see.
If this follows through, we may get a flush to mid-March after a high in the end of Feb., then a bounce into early April before a flush into July.
I would view any drop this week with suspicion, as it could be nothing more than a re-test rather than a resumption of the primary downtrend.
Re-test sequence would follow as one or two white candles (Friday is one big one) one or two doji's, and one or two red candles. My favored would be another up day tomorrow, a doji day on wednesday, and a dump into Friday followed by a rally the following week to the above mentioned targets. We'll see if that transpires.
AI
