SPX took a little dip below yesterday's low this morning. It came within 5 points of the Aug. low. It suddenly took off to the upside with a rather spirited rally. Here is a look at the 15 minute futures chart.
Look at the upside volume on that first bounce. There was good volume again at the end of the day as well. This is the first sign on this decline of buyers waiting to step in. This pattern looks like it could form a short term bottom.
The ADX continues to be low. That is what it should look like on a retest.
I hate when price almost gets to an important number and reverses. Sometimes it ends up getting there anyway and sometimes it doesn't. There are some divergences in the internals. There is a rather obvious VIX divergence. This looks like a reasonable setup for a successful test of the low. All we need is for the bulls to show up in force in the next couple of days. We may still test the 1867 low first. Should SPX fall through that low instead of bottoming 1820 is the next key support level. Lets see if the bulls want to burn some of that dry powder.
Bob
No comments:
Post a Comment