SPX bounced off the top of the support zone, the 50 SMA, and the lower price trend channel. That all seems to make pretty good sense. The breadth at 64% positive and new highs at 112 were not explosive by any means. With this much support, I think we should have had a reading closer to 70% positive on the breadth if this was a kick off to new highs. We will have to see if there is any follow through tomorrow. Here is the 60 minute SSO chart.
I have added a resistance line at the 10/11 high. There could be some resistance there if we test that level tomorrow.
With the technical damage that has been done, we will have to see some real strength to suggest the market is really going to break out to the upside again. There is more room for this bounce to carry and still not break the downtrend. My best guess is it will lead to a good swing short. We did not have much oversold pressure built up in the price action and we just released what we had. If this market rolls over again, it should break the recent low.
Chart practice has been updated with AAPL the stock for today.
http://traderbob58-chart-practice.blogspot.com/
Bob
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