When the upside break out from the triangle failed to attract buyers the expected action was to fall below the uptrend line from the Feb. low. That finally happened today with the support of options expiring on Friday gone. Breadth was -76%. New highs were 31 while new lows increased to 141. SPX rallied considerably off the low late in the day. That might have been because of the upcoming FED meeting on Wed.
The futures dropped below all the moving averages. The -DI line climbed up over 35. That will often trigger a bounce. It did not do that back in early Feb. and the result was a cascade lower.
The red count crossed the green line and is above 50. The bears are trying to take control.
The market got extremely oversold on an intraday basis and bounced into the close. The futures rallied even more after the close. I have mentioned for years how the market usually gaps up the day before the FED meeting (Wed.). Today's late day bounce could be for that reason. I made a rule back in the last decade not to be short the two days before the meeting. It almost never pays. A bounce into the announcement is possible. I don't know if we have started a move down to test the Feb. low or not. I want to see confirmation of today's apparent break down by a close below today's low. A bounce that fails before climbing back above the 50 DMA could be a decent short op. The bulls are going to have to show up in force. I don't know if they have the heart to do that at the moment.
Bob
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