Technical Tuesday – Can Draghi Give Us Strong Bounces?

January 20, 2015 at 08:17 AM EST

2,027 is our goal today for the S&P . After that, we'll turn our attention to 2,040 tomorrow (the 10% line on our Big Chart) and we need 22 Nasdaq points to make that strong bounce line and then we'll look for 4,700 to come back on MORE FREE MONEY from the ECB on Thusday . Our Bounce Lines from last were were (and still are): Dow 17,280 (weak) and 17,460 (strong) S&P 2,006 (weak) and 2,027 (strong) Nasdaq 4,608 (weak) and 4,656 (strong) NYSE 10,560 (weak) and 10,670 (strong) Russell 1,172.50 (weak) and 1,185 (strong) China made their own weak bounce overnight and that's already enough to get our Futures back on track but, as you can see from the chart on the left – this morning's bounce to 3,173 erases only 50 points out of a 275-point drop, which just happens to be the very definition of a weak bounce per our 5% Rule™. So, to sum it up – we are likely to have strong bounces as traders are relieved to see China having weak bounces and, of course, in anticipation of MASSIVE stimulus coming from the ECB on Thursday – what could possibly go wrong? IN PROGRESS

2,027 is our goal today for the S&P.

After that, we'll turn our attention to 2,040 tomorrow (the 10% line on our Big Chart) and we need 22 Nasdaq points to make that strong bounce line and then we'll look for 4,700 to come back on MORE FREE MONEY from the ECB on Thusday.

Our Bounce Lines from last were were (and still are):

Dow 17,280 (weak) and 17,460 (strong)
S&P 2,006 (weak) and 2,027 (strong)
Nasdaq 4,608 (weak) and 4,656 (strong)
NYSE 10,560 (weak) and 10,670 (strong)
Russell 1,172.50 (weak) and 1,185 (strong)

China made their own weak bounce overnight and that's already enough to get our Futures back on track but, as you can see from the chart on the left – this morning's bounce to 3,173 erases only 50 points out of a 275-point drop, which just happens to be the very definition of a weak bounce per our 5% Rule™.

So, to sum it up – we are likely to have strong bounces as traders are relieved to see China having weak bounces and, of course, in anticipation of MASSIVE stimulus coming from the ECB on Thursday – what could possibly go wrong?

IN PROGRESS