European markets were down over 1% this morning which caused a minor gap down in the futures. After the open there was quite a bit of seesaw action only to end up near where we started. New highs increased to 125. New lows increased to 86. That is a bit concerning. SPX appears to be back inside the trend channel. A bounce would take it back above easily at this point. I want to see more downside before getting on the bearish bandwagon.
The futures held support at the lower channel line. They are below the 20 SMA, but there is no confirmation of a break yet.
The green count crossed back below 50 again. It is still above the red line though.
I do not have any idea why Europe was so weak. The U.S. market had some kind of strange rotation going on. There was strength in SOX, XLF, XRT, and XLU. Other sectors and indexes were down modestly. I don't know if there is any message in that or not. The retail sector had a lot of big gaps during earnings season both up and down. SPX is within the confines of a normal pullback so far. The Jan. high (2872) is key on the downside. The SPY option resistance comes in at 290-1. Everything in between is just noise.
Bob
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