There was pretty good volume today and we closed above the Sept. high. Price is still extended of course, but it does not matter until it matters. Lets zoom in to the 195 minute SPY chart.
This morning there was a blue bar indicating price was outside the upper Bollinger band and extended. I have noticed that this condition on this time frame often leads to a pullback. You can see a lot of short term tops and bottoms with the blue bars on this chart. Will that be the case this time? I learned this by not taking some profits when those blue bars showed up and wishing I had, LOL. This was the first blue bar since the rally off the late Dec. low started.
These are the two other key charts now. The COMPX and the Dow.
The red lines mark the highs from last fall in these indexes. The COMPX has quite a ways to go. What I believe needs to happen for the bull case is that both of these indexes need to close above the red lines while SPX stays above 1475. The Dow is the closest and if it gets there that would increase the odds some on the COMPX. If SPX closes back below 1475 I would expect that will bring in some sellers.
These daily charts look like people are way too eager. It seems to me that whenever I see a move with very tiny counter moves it usually leads to an in your face reversal. That is what happened in Nov. We kept going down in waves of selling with very little up moves in between. We are now doing that on the upside. I guess time will tell how this works out. Will the bulls keep showing up and chase price or will the market suck them in and pull the rug out? Stay tuned.
Bob
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