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Tuesday, November 6, 2012

Daily update 11/6

I guess they saved the election rally all for one day.  Lets start with the SPX daily chart as usual.

SPX closed just below its 18 SMA.  The volume was a bit heavier then yesterday, but still on the light side.  The bears showed up a little bit late in the day.  This is where the rubber meats the road here.  Will the bears show up again tomorrow?  Lets zoom in to the 130 minute SPY chart.

The volume pattern is still clearly bearish with red volume bars dominant.  This looks more like working off an oversold condition rather then starting a new leg up.  I think this is likely to roll over and head down again. If it does, we should test down into the 1395-1400 key support area on SPX.  For the bulls to get control back, SPX must get above its 50 SMA (1435) and demonstrate the ability to stay there.


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