The indexes managed to rebound over the last hour of trading today to close in the upper half of today’s range. They did this on above average volume which suggests that we are starting to see some underlying strength. The Dow closed up 0.54%, the NASDAQ  down 0.29%, the NYSE down 0.05% and the S&P 500 up 0.18%.

The main thing you want to see now, if you’re a bull, is a follow-through where the markets finish off the week up and volume is increasing.

Here’s a chart for the S&P 500:

Prices have started to even out as they approach the level of support signaling underlying strength.

As expected, volume is picking up and we are getting more churning as the indexes get closer to the area of support. I would expect to see some sideways action around this point and we will have to wait to see if there is a definite direction the market makers want to push stocks.

Also, the VIX jumped up to 22.73 today but was in the middle of the range which could mean a slow down in volatility moving forward.

Hold on to what you have at this point and don’t add new positions until the market figures out where it wants to go. It is a coin flip trying to guess if we will bounce or continue to fall.