Today the market pushed down from its intra day 60 minute chart wedge formation. What this basically means it tested the lower trend line and was pushed back very quickly ... aka ... it failed the test. We should see weak prices over the next few days. Not to say we will not have a rally or two in the meantime. I would like to see the S&P 500 move below the 800 mark before I would feel comfortable executing any long positions. This should work off some of the severely overbought conditions that are shown on the above chart. The market had a total net inflow of just under $200 million and the QQQQ's ETF had a net outflow of around $31 million. Therefore, one has to assume that the commercial money was selling today. Also, added to the selling pressure, 58% of all volume traded was lower today (all market information was obtained from The Wall Street Journal).
I believe if the market pushes above the 860 to 875 mark on heavy buying confirmed with commercial buying of the ETF's like SPY and QQQQ ... then the market will move much higher in the near term. If this does not occur then we should see lower prices. I do want to point out one item that concerns me ... look at last nights blog and I pointed out on the volume chart how the black indicator line was peaking and it historically confirmed some type of bottom in the market. Well look at the blue pointer above on the volume indicator ... it is peaking again ... just a word of caution. We do have a downward divergence on the Tick data chart above and at higher prices ... this is usually bearish for the near term (first chart below the price chart above).
As always use your stops and limits to protect yourself.
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