The short sellers really want to believe here, but I'm taking the other side of that - covering/buying where I see prices I like.
Volume is light - and this selloff is eerily quiet, if you're teasing The Shark that is... This 823 line (solid green in chart below) of TREND line support is one that has been toyed with enough times here today for me to have confidence in its relevance. That's the TREND's Shark Line, and I see another squeeze potentially occurring from there - we could shoot straight up to the 853 line on the SPX (dotted red line), and I would not be surprised.
Yes, the VIX and the US Dollar are up on the day (bearish for stocks), but neither has traded up through what I would consider material resistance. TRADE resistance for the VIX is $44.36, and TREND resistance for the USD is $84.90.
Riding a bull within a bear cave is not for the faint of heart, but be careful if you're out there shorting this selloff - teasing Sharks isn't a repeatable process.
Keith R. McCullough
Chief Executive Officer