SPX popped up to 2398 mid day, but ran into sellers before 2400. After a selloff it rallied back to try again, but was met with more sellers. A smaller bounce in the afternoon rolled over which led to selling into the close. I guess some investors were anxious to sell. Sometimes they wait at key levels to see if the market stalls and sell if it does. Not the case today. Breadth was +54%. New highs were strong again at 282.
The futures were really extended as SPX approached 2400. Is this going to be another failure to stay above 2385?
The green count turned down a little bit more today, but remains well above 50.
Today's reversal on a test of the high leaves SPX with a possible double top. Clearly there was resistance there today. With a little consolidation or pullback it could turn into a bullish cup and handle. There are plenty of negative divergences around, but those have not stopped this market very often in recent years. If 3/1 was an exhaustion gap then this retest should fail and the market should head lower. The trouble is I don't know how to tell if it was an exhaustion gap without the benefit of hindsight. I think it wise to pay attention to what the market does over the next week or so just in case.
Bob
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