SPX closed back inside the upper Bollinger band today. However, it is still extended from the 18 SMA and in a major resistance area. This is still not a good place to initiate swing trades. I have heard a lot of traders on TV looking for a test of the Sept. high in the 1475 area. The biggest problem with that is the over bought short term condition. Is anybody going to buy here to push it up there? Lets zoom in to the 195 minute SPY chart.
There was another drop in volume today. I am sure that is because price is too extended to buy and everybody that is already long is waiting for higher prices to sell, LOL.
A test of 1475 without a pullback to alleviate the short term over bought condition is highly likely to fail. Earnings will be starting up after the close tomorrow. We will have to see how the market reacts to them. The market is overbought and at bull market highs. Will they be good enough to push prices significantly higher?
Chart practice has been updated with CLF the stock for today.
http://traderbob58-chart-practice.blogspot.com/
Bob
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