A Quirky Rebound

After another immediate fade off strong pre-market futures, bulls furiously rebounded to stage a sharp upside reversal this morning. For the majority of this young 2016, buyers have been unable to sustain any type of meaningful bounce, simply setting up the next thrust lower.

However, on the back of the "falling wedge" trap we have been tracking on this site and for Members, on the 30-minute chart of the QQQ (ETF for the top 100 stocks in the Nasdaq Composite Index), we now have a bullish engulfing candle this morning. This candlestick essentially overpowers the initial fade lower off the open, giving buyers a fair chance to pounce for even a modest bounce. 

Of course, timeframe is key, and the overall technical damage in the market will likely take weeks to repair before we are off to the races for a new uptrend. Furthermore, there is also an issue of whether buyers can hold this bounce for the rest of this session alone. 

Essentially, we are now looking to see if bulls can sustain a trend day higher (higher lows, higher highs) after the opening shaking and baking. If so, that would add credence to the idea of a short-term bounce. Back below $101.75, however, puts the whole reversal thesis into question and may open the door to more downside fireworks.