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Wednesday, August 5, 2020

Last downside gap closed 8/5

Mission accomplished!  SPX managed to close the 2/24 gap down today.  Now what?

SPX pulled back a little bit when it hit the edge of this downside gap back in July.  I don't know if it was enough to alleviate the usual selling when a gap of this magnitude is closed or not.  We will have to see what transpires in the days ahead.  The only remaining objective would be to forge a new high in SPX.  Time will tell if that happens.

Neither the red/green count nor the short term indicator is in an overbought condition yet.  There is more room to run if the market wants to. 

I don't think SPX would get much past the old high should it get there on this go around.  Overall, the market is pretty thin now and in need of a pullback.  I guess we continue to play along with the bulls until we get a reason not to.  We just have to watch to see if there is some kind of negative reaction after closing that big downside gap.


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