The charts for the most part moved to neutral except for the 40 DMA % Index which is close sensitive while the 52 week new highs is high of the day sensitive and the 10 day high low is low of the day and high of the day sensitive. The close was terrible and hence we maintain the –6 rating on what should have been at worst a neutral day.
Looking at some previous bottoming processes we see there is often a lot of volatility and afternoon selling. We also see that every other day often reverses for a week or more, frustrating the bulls and the bears alike before finally breaking out into a new direction.
Our breakout zone now in this chop area are 1105 to the upside and 1040 to the downside. That is a large 65 SPX point area but as long as we are flying in those bands you can expect some choppy market action as the bulls and the bears exchange thrusts.
For today the bulls would like to hold 1050 and break up and through that 1077 area where we failed yesterday. ES is right below that 1065 area with a morning gap up as I write. That 1065/1068 area has been trouble so the bulls need to slice through it and the bears need to at least hold for sometime there before a last stance at 1077 for a victory today.
Bulls win on a close above 1077, extra credit for 1082.
Bears win with some prints below 1050 and a close below 1068. extra credit for a close below 1050
My best guess: Bulls win
