The price bar went back to neutral color and we closed below the green key support line. This puts us back in the trading range that formed in mid April. Trading range break out failures often result in a trip to the other end of the range. In this case that would be back towards the early April low. There is an interesting feature on the 130 min SPY chart I want to show.
SPY formed a head and shoulder top pattern over the last few days and broke below the neck line today.
A measured move of this pattern would take SPY down to 137.20 area. Late in the day price went back up and tested the neck line from below. It failed to get back above the neck which makes the odds pretty good the break was significant. Unless the employment data comes in way better then expected tomorrow I think the market is headed lower again. Lets take a quick peek at the weekly chart.
For several weeks the weekly candlesticks have shown tails at the highs indicating resistance in this area.
Price bars are still neutral, but the market has clearly lost its upside momentum. It could easily turn down from this position so we need to keep a close eye on things.
Bob
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