I guess the lack of buying excitement yesterday held over today. Maybe it has more to do with the price level then the holiday. SPX closed fractionally below yesterday's low, but above the 18 SMA. It is still within the trend lines that mark the expanding price pattern. Lets zoom in to the 60 minute SPY chart.
SPY is clearly stopping when it gets above 177. Its not exactly acting like resistance because of people wanting to take profits there. The first time that was the case back in late Oct. After that first time though SPY has gotten above 177 and just hung around. If there are a lot of sellers at a level price tends to get rejected rather then lolly gag around. The dip buyers have been doing their job, but rally chasers are totally absent. I think it is going to take a news event that inspires people to buy to push price higher from here. Every day that price stalls it increases the chance that short term traders will begin to take profits more aggressively. We can already see a potential triple top forming,
Both breadth indicators are still negative. There were 100 new highs today. We are losing momentum in that department. If SPX closes below the 18 DMA then we are likely starting a pullback for real. That seems likely to happen unless rally chasers show up soon.
Bob
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