There is no denying, yesterday was a washout of the breadth and slammed all the indicators I tracked down into the bear area except for our confirming 40 DPI which remained neutral but on the bullish side of the signal line. Today needs to rebound if the bulls want a chance to regain control.
Quote of the day:
Never try to tell everything you know. It may take too short a time. – Norman Ford
|
Chart |
Score |
Day-1 |
Change |
|
40 DPI |
+0 |
+2 |
-2 |
|
52 WNH |
-6 |
+6 |
-12 |
|
10 DHL |
-6 |
+6 |
-12 |
|
Total |
-12 |
+14 |
-26 |
Not much to say about the breadth charts. I had been concerned, particularly with the 10 DHL chart that we were in correction area. That concern no longer exists. Looking back historically at 10 DHL slam down days the next day almost always recovers. If it doesn’t recover, smack down days became markers for further weakness.
$SPX chart:
I was expecting decent upside on Tuesday and that obviously did not happen. The Monday touch of 1130 has the market in a correction that has now reach over –3% on the SPX. That is in the range of a normal correction on a bull leg. Any more and we question the market from the bull side.
The SPX made a little head and shoulders on the 15 minute (if you blur you eyes) with the head hitting the 1130 and the shoulders bottom along that 1107 line. The downside of that target is 1085 area.
1090 area on the downside continues to be critical and I am beginning to be concerned about that 1080 area as there is a lot going on the with a confluence of fib numbers and our head and shoulders.
This morning we have a decent gap up developing. Today is Fed day which has a fairly strong upside bias and we have 10 am New Homes news that should fuel the talking heads in that support double dipping.
If we do rally today the upside has it markers too..
1100 as a psych number. 1103 should take us up to major resistance at 1107 area. If we can break back above 1107 and then 1109 and close there the bulls should have done their job in neutralizing the breadth charts. Anything less and we might be talking about shorting for lower targets.
