The market rallied out of the gate then sold off mid day back down near the recent lows. However, the bears were not able to break the market down and it bounced going into the close. This has the look of a low. SPX got above yesterday's high on the initial rally and the afternoon sell off made a higher low. Here is a look at the SSO 60 minute chart.
The last bar on SPY has a lot more volume then SSO does so there was some significant buying at the end of the day. Both SPY and SSO closed above their 18 SMAs. All that is needed now is upside follow through by the bulls. We are coming into the quarter end window dressing period. It should not be too hard to generate a bounce from here. Both breadth indicators remain in positive territory. An hourly close above the last bar's high should be confirmation of the upside break of the 18 SMA. That should initiate a test of the highs. If we end up breaking yesterday's low instead I think it will drop pretty quickly. The last few days the bulls were defending the lows vigorously. If they fail there will be selling pressure. I would have thought that would have happened by now if it was going to though. I guess we will see.
Bob
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