SPX stuck its head above the 100 SMA, but failed to stay there. Breadth was +74% which was quite strong relative to the amount the indexes were up. That means more nibbling. A lot of stocks up a little bit. New highs increased to 65. New lows were 22 even with the big gap up. SPY opened right near its high of the day and closed about .50 lower. While it looked like a strong day there were sellers active all day selling into the strength.
The futures stuck their head above the 20 SMA and the red resistance line on both of today's bars, but failed to stay there. This is the second time they have touched the 200 EMA and were rebuffed. Despite today's buying frenzy resistance was still obvious. Whether that is still the case tomorrow remains to be seen.
The red count dropped a bit today, but remains above 50. The bulls still have some work to do.
Some people on CNBC were trying to say the market was up because of earnings. Then Bob Pisani mentioned that might not be the case exactly. He said Asia gapped up, then Europe gapped up and the U.S. followed. Did the market have any real fundamental reason for the rally? Spy opened near the high and the sellers went to work immediately. The low was put in during the first hour, but the sellers returned when SPY got back up to the high. It ended the day closing on the afternoon's low. It is possible today was a one day wonder. The bulls need to see upside follow through to get control back. While the bulls are trying to get a bounce going off the retest of the mid Sept. low the sellers have so far thwarted them. Who has the bigger hammer?
Bob
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