SPX closed back inside the upper Bollinger band today. Notice price keeps bumping into the upper trend line. The narrow range continued today. Lets zoom in to the SPY 195 minute chart.
Volume was very light today. Four out of the last five bars have upper and lower tails and very narrow bodies. Dip buyers are meeting rally sellers in a very narrow price range. That is a very odd pattern. Is the market winding up for a big move? If the market starts down there are several support lines now. We have the lower channel trend line, the slanted green line that marks the current up move, and the horizontal line that marks the multiple tops just before the break out to new highs. This market is heavily loaded with longs. If we end up breaking down below all those lines I would expect a sizable move down to follow.
Every time the futures made a slight new high the last two days they were quickly shot back down. Even though people were rushing in to buy those tiny dips, I think we need a deeper pullback to go higher. This does not look like a pattern people will chase higher to me. If we get a gap up on the employment report tomorrow I would not be surprised to see them sell it. This break out has not been tested at all. We have not even had a 195 minute bar close below a prior bar low yet. We need more of a significant down move to see where the bulls step in and how strong they are.
Bob
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