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Thursday, May 10, 2012

SPX daily update - uh oh

Yesterday I wrote "If this is going to be a successful test of the April low I believe we must rally tomorrow."  Well, it tried.  First the daily SPX chart.

SPX closed ever so slightly above the April low.  Is that supposed to inspire confidence in bulls?  It looks more like the market is hanging on by the skin of its teeth.  Check out the 130 min. SPY chart.

SPY found its high in the first few minutes of the open.  The first two bars of the day have big tails down showing bulls bought 2 dips trying to get the market going.  However, the collapse into the close was clearly a win for the bears.  Look at the volume bars in the 30 min. SPY chart.

The two biggest volume bars of the day were both red.  People were clearly more interested in selling the gap up then buying the dip.  SPX looks setup to go down tomorrow.  I see the futures are down after hours
as I write this.  If they are still down in the morning, I would expect a big down day.  I am not sure what happens if we get another gap up tomorrow.  I will not be in a hurry to do anything.  I will want to see how things shake out first.


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