I bet if you threw "741" and "bounce" into a search engine today you'd get a ton of hits.
I was away from a computer most of the day so missed all the hoopla. Fortunately, I don't consider anything that happened today to change the trend - yet.
S&P 30 Minute Chart - 6 Days since break below 800
Here's a 30 minute chart of the last 6 days. Except for the very brief cup of coffee back in November, this is the only time this go-round that we've spent any time below 800.
I circled the area of the retest. You'll notice that as the S&P came up it stalled and reversed at the first resistance it came to (758). Then Bernanke talked and the rest is history.
Check out the interesting chart pattern - an inverse head and shoulders (circled). That is always a strong reversal pattern - and see how it just cruised through 758 and finished just below the first real resistance at the 777 level. If I had been watching I probably would've considered jumping into FAS for a quick scoop once it passed 758.
As it is though, this little bounce hasn't really met any other real resistance - it should hit some at 777 and then around 790 (I posted about that area on the way down) and then a major resistance in the 797-800 area.
The 3-day chart high drops tomorrow down to 778 - but today was at 797 so downtrend is still intact. A perusal of the Dow chart shows that the Dow still hasn't tested and gotten past it's downward price channel.
Dow - daily chart
So there's all sorts of pitfalls standing between this being a bounce or a bona fide uptrend. Depending on what happens tomorrow at the 777-78 mark I may switch over to FAS/SKF. We are due for a little bit of an uptrend although I won't be surprised whichever way it goes - futures are currently down, so breaking further out to the upside isn't necessarily a sure thing.
I wouldn't be surprised to see a few days-length pennant triangle from here with lower highs and higher lows that lead to a breakout- we already have the first two bars in place.
Later.