Not Much Margin for Error Now

In the face of another potential leg lower for crude oil, with the USO ETF currently off by more than 3%, equities are sustaining an intraday bounce well off session lows.

In fact, the Dow is back in the green as I write this after slumping by more than 400 points this morning. The QQQ ETF is up by roughly 1%, with various tech stocks shaking off the corrective tone and tenor of the tape. Banks are also well off session lows but still in the red, as XLF is down by about 1.6%. 

That said, this final hour of trading should dictate how much staying power the bounce truly has. By now, bulls should know that their margin for error is slim, as any glitch into the bell could easily see another scary futures session overnight full of panicky longs looking to sell any bit of strength to flip a scalping profit (or cut losses). 

On the S&P 500 Index, the 2630 level has been the approximate lower area support of this corrective range since October which equates to about $263 on the SPY ETF. If bulls cannot so much as muster a close above that level today, I would view this bounce with greater skepticism, as a bottoming market typically sees a flurry of buying in the closing bell on a reversal day to effectively shut the trap door on shorts in the hole.