That certainly was an in your face reversal. Buyers were pretty scarce today. Lets zoom in to the 195 minute SPY chart.
Both volume bars were elevated today. More distribution? SPY closed with red bars and below the 18 SMA this time. Lets take a peek at the 60 minute chart.
We clearly broke the 50 SMA today. Is this an important reversal? I guess time will tell, but it looks like it to me. However, I think we all know about my current bearish bias at the moment. Hopefully that is not affecting my chart reading. Lets look at the breadth chart.
The McClellan oscillator is negative, but the 10 DMAs have not crossed yet. That could happen with one more down day. That would go a long way to confirm a pullback has started. We will just have to see if the bulls show up again tomorrow or not. A close below today's low in the next couple of days would be good confirmation of a down move.
The market has ignored a lot of bad news on the way up. However, in the market it does not matter until it matters. The long trade is extremely crowded as I have shown with several blog posts recently. If it now matters, this market could head south pretty fast. We will need to see how the buyers and sellers act over the next few days before we can determine how significant today was.
Chart practice has been updated with JOY the stock for today.
http://traderbob58-chart-practice.blogspot.com/
Bob
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