ST trend: up (with potential topping pattern)
Yesterday we were mentioning the ST trend was down with a potential bottoming pattern as buyers were inefficient via FGSI and they had lost ML. However FGSI was at extreme pessimism, so a bounce was likely. The market did what we expected as it did bounce, but that bounce failed and in the end it resumed lower to make new lows. RTH closed at the lows, which we mentioned in our chatroom that is likely a bear trap.
The o/n proved the bear trap to be true. Buyers managed to hold yesterday's low, despite testing it 2 times, after which they launched higher. More importantly, they won ML back. That is a serious warning for sellers. If ML managed to hold, then the up trend will resume. FGSI is at extreme optimism up here, so a pullback is expected. If buyers manage to hold ML on that pullback, that would be the ideal bullish scenario. Sellers want to see ML fail on a sustained basis to arrest the bounce and attempt more downside.