Despite the optimism at the open the sellers went to work right from the opening bell. There were enough buyers to hold the market up though. The breadth was +58% despite SPX being negative. Small caps were positive. Strength in the dollar might have been the reason for that. New highs dropped considerably to 62. New lows also dropped a bit to 26. Resistance in this area held for today.
The futures tagged the 200 SMA and turned tail and ran. That is a logical place for this rally to end.
Today could easily have been the end of this rally, but we need to see follow through selling. This is a good place and a good technical condition to end. Will the bears show up in force next week? Stay tuned.
I have heard plenty of bullish comments lately. Some think this rally means the recession case is off the table. Things are great get long and enjoy. Let me be clear. We are in a bear market. The duration and magnitude is unknown. The only all clear sign possible at this time is for SPX to get above its 200 SMA and stay there. Period. Nothing about the current low looks even remotely like a bear market ending low. The VIX did not even get one close above 30. Hardly the stuff of major bottoms.
According to this chart world trade continues to fall off a cliff.
Many countries including China and India are seeing double digit drops in both imports and exports. The global economy is in trouble.
The market and sector status pages have been updated. Have a great weekend.
Bob
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