After a gap up there was a little bit of buying that took SPX up to the upper trend line. That corresponded with SPY getting a little above Friday's high. The sellers put an end to the move though and sent prices back down toward the break even point. A few buyers showed up and kept most indexes positive. Due to sector specific news the biotech sector had a very bad day. SPX managed to stay above the lower trend line, but not by much. Breadth was +59% about inline with the move.
Once again the red price bars on the futures were not confirmed with a lower close. Once again they closed back above the 20 SMA. Still not an inspiring price pattern.
The green/red bar chart is showing a decreasing number of greens and increasing number of reds. Both are below the 50% level. Kind of in limbo here.
The main thing we learned today was that the Friday high in SPY was resistance. However, the sellers were not aggressive enough to take prices below Friday's low. If tomorrow is down then the odds that we are embarking on the retest of the low should increase considerably. Buyers clearly lacked enthusiasm today so that is a possibility. However, in the absence of bad news they could always bid the futures up again overnight. Sellers also lacked enthusiasm today and I still believe there may be a lot of investors hoping for higher prices to sell at. If no real selling catalyst comes along we might get somewhat higher yet.
Bob
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