As I type, the market futures are red, but I expect a market bounce sometime this week. On Friday, the market came back up to 200-day moving average support (I’ve added the 200-EMA to my charts below in light blue):

The 200-EMA level has been a common place to bounce from if you look at the pullbacks in February, April, and May. In addition, RSI has come down to an oversold level which indicates that the market could be undervalued.

With that said, I don’t think the market will spring back quickly to all-time highs. There are plenty of buyers stuck in this pullback that will be looking to get out of the trade even. This means that the market will need to grind back up to where it was at the beginning of the month.

The trade of the week for this week is Shoe Carnival Inc (SCVL). I really like how this stock has been coming back around over the last week while the market has been falling. Stocks that are up on a down day will typically do well as the market turns around. A buy around $38.31 would be a good price. With strong support in the high $36 range, I think that a drop of more than 5% is not likely. I will be watching to see what the market does in the morning. If futures turn and look green, I may buy pre-market near Friday’s close of $38.62. I try to never go long in the middle of a market pullback, so if the market gets crushed early on, I’ll probably wait until lunch time to buy in. If I don’t get filled today, I’ll look again at my price targets and try again tomorrow.