The market started out like a house on fire this morning. Over 85% of NYSE stocks were positive on the day early. However, by the end of the day it looked like somebody had thrown cold water on the bulls. Breadth even ended up negative. Here is the daily SPX chart.
We have a gravestone doji candlestick in the area of our down trend line and 18 SMA. If this same pattern was occurring below the 200 SMA then I would say odds were very high we would go back to the recent low from here. However, we are still above the 200 so the bulls may show up again. Lets zoom in with the 130 min. SPY chart.
One thing that troubles me is the biggest volume bar of this rally came this morning while the market was selling off from the big gap up. We finally got the first bar that closed lower since the low. In the absence of positive news, I would expect some follow through on the down side first thing in the morning. Then we will just have to see when and where the bulls show up again. I probably should say if the bulls show up again. It is still possible this entire price pattern the last two weeks is nothing but a consolidation that will break lower. The bulls really need to prove they are serious.
Bob
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