The market rallied a bit right after the open. At the high the breadth was +71%. At the end of the day it was +57%. New highs slipped again to 49. New lows came in at 18 near where they have been. SPX dipped slightly below the 20 SMA, but found a few buyers there. This is the first touch of the 20 SMA since early Nov. Usually that is good for a bounce. Of course that would depend on whether the pension funds still have more stock to sell or not.
The futures closed below the 50 SMA yesterday. Every bar since has closed within 2 points of that close. There is no confirmation of a break of the 50 yet. Most of the time we get a bounce when confirmation does not happen right away.
The red count crossed 50 today. The bulls are losing their grip.
The market is in position to bounce, but will it. The "why buy know" theory is still in play along with unknown pension fund selling. There was a little dip buying today, but would there be enough tomorrow to really push prices much higher. Whether there is still pension fund selling to be done or not I cannot say. The idea that a lot of investors are waiting until next year to sell seems valid to me. It seems like this pullback might have further to run.
Bob
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