The market gapped down again and tested a bit below yesterday's low. However, dip buyers came in to hold the market up. There were several tests, but no break down. In the afternoon the buyers made some headway and SPX was positive at the close. Breadth was slightly negative. New highs were stable at 64. New lows were down a tad to 19.
The futures ended the day with a bullish engulfing bar. I would not be surprised to see a bounce back to close yesterday's gap down.
The green count dropped below 50, but remains above the red line. The bulls are still in control.
There was quite a bit of back and forth at the lows today. The buyers were definitely there and absorbed the sellers. I would think that would lead to a bounce on Monday. I don't know if we are going to new highs or not. The bulls might be intending to pushing SPX above the 200 DMA and see if that sucks people in. The market is overbought and optimistic while below the 200 DMA, but the sellers have not come out enough to turn the market around. All this is going on while any day a headline can cause complete mayhem. Be nimble or on the sidelines.
I think I finally figured out why the ECB stopped their QE program. They were starting to get worried the Eurozone might fall into recession. Since they already have negative interest rates the toolbox for fighting recessions would be empty if they kept QE going. This way they can restart QE if/when things get bad enough. I believe the ECB has good grounds to worry.
Bob
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