Yesterday's test of the Jan. low brought out a few dip buyers today. The breadth was +78%. New highs actually dropped considerably to 22. I suspected the big increase in new highs we saw lately were mostly bond related items. With most bond related things down today the new highs really dropped thus confirming my suspicion. New lows also dropped considerably, but remain elevated at 136. Volume was noticeably lower. Today is exactly what I was thinking yesterday when I wrote "In the absence of bad news the bears might wait to see if the bulls step in for a bounce here. There seemed to be a reluctance to sell near the lows." The much lower volume indicates sellers stepped back more then buyers stepped up.
The futures made it up to the 20 SMA. This could be resistance. We need a confirmed break of the 20 next week before we can even say we are in a micro uptrend.
The red count dropped a bit, but is still well above 50. The bulls have more work to do.
This afternoon SPX did a slow creep up into the close. Buyers were acting reluctant to chase price. This close to the low that is not a particularly good sign. Maybe it was just some hesitation in front of a three day weekend. I don't believe selling is exhausted, just taking a break. The news flow could easily determine how much higher (if any) we go before the bears show up again. While we clearly have the possibility of a double bottom and rally today was not convincing at all. If we get some bad news early next week the sellers may come out of the woodwork again. The bulls need a strong up day on Tuesday to get a rally going. I don't have a clue what the odds of that happening are.
This is an excellent article. I urge everybody to take a few minutes to read it and share it with family and friends. "American Capitalism" No Longer Serves Society
The market and sector status pages have been updated. Have a great weekend.
Bob
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