Today we hit the summertime price channel upper trend line and the down trend line from the April and May highs. We have a shooting star daily candlestick. The volume the last two days was really low compared to the volume on the last pullback. That makes the last bounce pretty suspect to me, but we will see. We are at the upper rail of linear regression channel again, indicating we are short term over bought again. It has been so long since we last touched the down trend line I have no idea if it is significant or not. It is intersecting with the round 1400 number which may add resistance to this situation. Is it any wonder the market stalled today.
Here is the 30 minute SPY chart.
We hit the resistance shown in the daily chart first thing this morning. After consolidating all day, the market sold off going into the close. Normally I would expect some follow through selling in the morning. I am not sure we can call this market normal lately.
The last two days look like a last gasp to me with that low volume. With the potential for significant resistance here, the highest odds for what happens next would seem to be another pullback. I still believe the market internals are saying a pullback could turn into a true move down from here. This move up has made a lot of people into believers of the rally. The move looks corrective in nature to me, but that could be because of my overriding bearish bias. That bias is coming from my perception of the fundamentals. I could be silly for thinking that fundamentals actually matter. Time will tell. If you look back at historical price action, I think you would be hard pressed to find a big move up that started with a daily chart similar to what we have.
The chart practice site has been updated if interested.
http://traderbob58-chart-practice.blogspot.com/
Bob
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