A weak unemployment report sent the futures lower before the open. However, there was not a lot of selling interest into the weakness. That allowed the dip buyers to support the market and end the day with a bounce.
Notice the volume dropped today indicating a lack of sellers into the price weakness. Breadth was -54%. New highs dropped way down to 46. New lows came in at 49.
The futures found support at the 100 SMA. They ended the day with a bullish engulfing bar. That suggests a bounce is possible on Monday.
The red count is getting close to an oversold level.
SPX failed to confirm a break of the 200 DMA. Next week is option expiration which is usually an up week. However, the weekly chart shows a doji bar last week followed by a bearish engulfing bar this week. That tends to be a bearish pattern after a big rally. It is important for SPX to take out the recent highs. A failed rally here could increase the selling pressure. If the market keeps falling the 50 DMA becomes a likely target.
Have a great weekend.
Bob
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