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Friday, September 20, 2013

Daily update 9/20

About face.  So far the market rallied for an hour after the FED announcement of no taper and has been drifting lower ever since.  Here is the daily chart.

SPX stopped right at the potential support level at the Aug. high of 1709.  The volume was very heavy, but it was quarterly expiration so that is normal.  This is where the bulls should show up or it is game over for this break out attempt.  I would think they will show up Monday morning.  What happens if they get a bounce going should tell us more about the status of this break out.  The bulls need to show they are willing to bid prices above the trend line connecting the last two tops.  A weak bounce would not be much better then another down day.  In between 1709 and that line and the market is in no mans land.  If we go down again on Monday then a trip to the 50 SMA seems likely in fairly short order.

The breadth was really strong on this rally which usually means there will be dip buyers.  If not then the market is in serious trouble.   The more important question is whether there are many rally chasers.  That is yet to be determined.

Have a great weekend all,

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