The Big Bounce

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Our View

It's almost hard to believe that the ES could fall 141.75 points from its Friday high to low and then rally 99 points yesterday. I really believe the takeaway is that when you have such a large decline, the algos, in their infinite wisdom, know when the ES and NQ are oversold and then run hundreds of buy programs all day. I'll admit, there have been times when the ES bounces off a weak close and reverses, but there are also a lot of times the lows lead to a low, so you can't discount the importance.

And you know what else you can't discount? The new algo that runs the ES up just before and after the close, like yesterday. It looked like the ES was going to rally late, and it did, but there was a drop down to 5464.00 at 4:00. After 4:00, the ES rallied back up to 5490.25, just 1.75 points off the high of the day. Clearly, someone has pushed a few new bots into the post-4:00 trade.