It looked like the market actually tried to rally today, but the sellers were just active enough to keep that from happening. SPX closed several points below the open. Breadth was +54%. New highs increased considerably to 107. I am not really sure what caused that. Very light volume today shows the lack of participation. More people should be back to work tomorrow.
The futures tried to push up through the 20 SMA, but failed. That type of action looks like we are in pullback mode.
Despite the fact SPX closed slightly positive the red count crossed above the green count today. Will the bears pounce tomorrow or will the bulls show up to save the day?
The green line in the short term indicator has not crossed below the red line yet. However, that indicator can change very fast. A down day tomorrow might do it.
It looks like we could be in pullback mode, but I think we need another down day to confirm that. If the bulls show tomorrow then a retest of the rally high is likely. If we continue down there are MAs that could provide support. Just remember we are in a primary downtrend and those lines might only provide short term bounces. While we might do a retest of the high the market was weak enough at the peak that this rally could be over. We might be headed back to the lows, but it is just a bit too early to tell.
Bob
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