Major US equity indices are at an inflection point ahead of the week's last full trading session, states Ian Murphy of

The S&P 500 (SPX) pulled back yesterday (top left), found support on the rising 21EMA, and closed higher than the previous session’s close—a classic washout reversal.

chart 1

The index failed to find enthusiasm for lower prices among sellers, so turned around and found interest among buyers.

Below it, the Nasdaq (IXIC) had a similar session, but failed to close high enough for a valid washout. The Dow (^DJI) found support coming in at the -1ATR line for the past four sessions. The Russell of midcaps (^RMCC) almost completed a reversal on the -1ATR. 

If this market is going to bounce from here and rally for Christmas, I suspect the decision will be made today.

chart 2

One stock from the new FBD watchlist grabbed my attention yesterday. Bloomin’ Brands Inc. (BLMN) met all the criteria for the strategy, except falling volume. I bought 900 shares; stops and targets are shown above. The stock has been in steep decline since October and met expected earnings on November 2. It has a short float of 17.5%, so if we get some upwards momentum, a short squeeze could cause this global restaurant owner to pop.

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