We are likely to see a bounce fairly soon but it will only be a Dead Cat Bounce in a new bear market. Indeed, based off the futures it looks like bulls are going to buy the open this morning [Thursday]. The NASDAQ essentially closed at its 50 DMA so this is a natural spot – Top Gun Financial, Thursday 12/2
The market bounced Thursday as I anticipated it would. The S&P was +1.42%, the NASDAQ +0.83% and the Russell +2.74%. NYSE Advancers to Decliners were 5,515 to 2,520 or a little better than two Advancers for every Decliner. Volume of 10.5 billion shares was solid.
However, this is just a bounce at this point. Bulls need follow through for it to be anything more. As you can see in the charts above, QQQ needs to reclaim $390 to resume its uptrend and IWM is still smack in the middle of the range its been in all year long. It’s a start but the market is guilty until proven innocent right now IMO.
On the earnings front, $50 billion cloud signature company Docusign (DOCU) got smashed in the after hours (-30%) after reporting weak guidance in its 3Q earnings report. If these prices hold tomorrow, DOCU will collapse beneath the bottom of the above chart. Another soldier bites the dust. The generals will soon too.