Over the past two days, the broad market appears to have put in a short term bottom. However, we are still in a downtrend and will be looking for shorting opportunities into any bounces. Below are charts of the Nasdaq and the S&P 500 that show the next significant resistance levels on both indices. Notice that volume has, thus far, been light compared to the volume during the recent decline. This type of volume action is typically viewed as bearish. We will be looking for the S&P and Nasdaq to form reversal candles near their respective 10-day and 20-day moving averages, as a signal for taking on potential new short positions.
