The bulls are not exactly tripping over themselves to buy. The breadth was -63% which makes today slightly weaker then it looked on the surface. It looks like SPX closed back inside the triangle, but just barely. I guess that makes a lot of sense. SPX has been trying not to go anywhere all year. Why change now?
The futures came up just a tad short of touching the resistance line. They are still above the key moving averages. However, when trying to break out of a long trading range like we have here the market must show some strength to make people believe it is headed higher. That ain't happening so far. This just looks like more of the same directionless action. Notice the ADX line is on the floor again like every other rally attempt the last few months. The market has no energy whatsoever.
I think this next chart shows the lack of energy pretty well.
Yesterday we had 55% of SPX stocks with green daily price bars, but today we dropped down to just 27%. The bears pulled back ahead with a 30% reading. Is this little bounce over already. I can't say yet, but it is definitely not inspiring on the upside.
If there is downside follow through tomorrow SPX will clearly be back in the triangle and probably headed for the bottom trend line with a fairly high risk of breaking it. While dip buyers keep showing up there is clearly no impetus for bulls to push prices higher. I don't see how we will just keep holding up forever. The internals are crumbling. The dip buyers are likely to lose their enthusiasm if they don't get some reward soon.
Bob
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