Bears Swing First, Bulls Swing Back!


Simpler Trading Team

3 min read

A True Bear Vs Bull Market Day…

Coming into the day, both Nasdaq and S&P 500 futures found themselves trading negative with strong momentum into the cash session open. There was a good amount of ground that the bears made overnight. The selling pressure was strong and consistent through the night, bringing the market lower into the Initial Jobless Claims Report. Once the economic release occurred, the bears took no time to further their progress in the movement that was made overnight.

As the opening bell rang, the bulls did their best to step in and stop the bears in their tracks. The price was volatile in the opening hour of the market before the bears ultimately regained control. The bears had stood their ground once again, stuffing any momentum that the bulls would try to put on. The Volume Weighted Average Price (VWAP) was consistently a place of resistance that the bears defended at the open and for the majority of the day.

In the late morning session, the bears were having a field day. This is where the bears were able to continue to show their dominance by stopping anything that the bulls tried to put into action. As mentioned in yesterday’s article, very directional days will provide many opportunities at VWAP. The theme and price action were no different for the majority of the day. The market would go lower, then back back towards VWAP, only to be rejected and make another low.

By Mid-afternoon, the tide had changed. The bears had run into exhaustion and left an opportunity for the bulls in the market to take back over, which is exactly what they did. The bottom of the day came around the psychological level mentioned in our previous article. The important level to watch was 3900 on the S&P 500 futures. This level proved massive as this was the low of the day.

Once the market reached the psychological level of 3900, the bulls took back control of the market and did it in a big way. The losses on the day were notable but not big enough to stop the bulls from overcoming them. The tide changed, and the bulls took the momentum back quickly, putting in a strong base before the last hour of the day.

During the last hour of the session, it appeared that the bears had exerted all of their energy. This can be attributed to the price action of today, but more importantly, the last few days as a whole. The bears had already made a significant move, and when they took a rest, the bulls took full advantage. Over the last hour, the bulls had built enough momentum and strength to fully engulf the losses on the day and get back positive. The end of the day was pure buying pressure, with every small dip being bought up. There were consistently higher lows and higher highs to provide a clean uptrend to ride off into the close.

At the close, the Nasdaq was still unable to get back to positive on the day finishing down .32%, or 11,778.75 points. On the other hand, the S&P 500 recovered its losses and closed up on the session, gaining .27%, equating to 10.75 points. The Dow Jones was also able to finish the day positive improving by .37%, gaining 118 points on the day.

Options with Henry Gambell
Futures with Raghee Horner