Today was a hanging man on an increase in volume. Is that a sign the long awaited pullback is going to start? Lets look at the SPY 195 minute chart.
That big red volume bar today was the highest volume bar since the opening bar of the year. That is definitely distribution. The rally in the afternoon came on declining volume. Lets look at the current breadth chart.
The McClellan oscillator is negative again. The 10 DMA lines are getting closer together, but have not crossed yet. Another down day would take care of that.
This was really the first day where the bears showed some serious volume on a sell off. Europe and some Asian indexes have already pulled back some. Are we going to follow them down? A close below the low of the last few days should kick it off. The long trade is very crowded as I have shown in numerous posts. It would not be unusual for a lot of them to want out all at once. We could easily have a wide range down day or two coming up. At this point I think it will take a big gap up above the highs to continue this rally. I do not think we will trade through the resistance during the day. If the rest of the world keeps going down, the odds of that happening will keep getting lower.
Bob
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