The bulls showed up this morning, but were met with sellers. The dip buyers managed to keep the market from crashing again. SPX closed right at yesterday's low. Breadth was -51%. New highs dropped way down to 27. New lows were up slightly to 145. SPX did not confirm a break of the 20 SMA. I guess that keeps their hopes alive to continue the bounce. Some people are talking about a possible inverse head and shoulders developing. I can see that, but I have no idea what the odds are of that playing out. The market might need a closer retest of the low.
The futures did not confirm a break of the 50 SMA. That keeps the bulls hopes for a bounce alive.
The green count fell further, but remains above the red line. At the risk of being repetitive that keeps the hopes of a bounce alive.
Today seemed to be adding to the consolidation that started forming mid day yesterday. SPX tried to break down below yesterday's low a few times, but buyers stepped in. Rally attempts were sold into. If the bulls engineer a bounce from here I suspect it will run out of steam at the 50 DMA. If we keep falling there could be SPY option support around 270.
Bob
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