While traders overall are bearish, it seems that active short selling is lacking in this market. Unlike in May and June, when shorts were more prevalent, the short base seems to be shallow this time around. Without a lot of shorts, short covering rallies will be weak. This converges with my belief that the bounce this time will not have much energy, and 1080-1085 should be a ceiling that will be hard to break.
I am expecting a small gap up tomorrow after the buyers come in after the jobless claims number.
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