If today was the first day I looked at the SPX (1142.16 ↓-0.57%), I wouldn’t feel very confident in a move above 1150 tomorrow.
The positives:
- Today’s reversal was on low volume.
- SPX continues to hold above 1131 and therefor still somewhat in an uptrend.
The negatives:
- Maybe the low volume is representative of low buy interest
- The end of the day was nasty. No one wanted to hold shares overnight.
- MACD Histogram (one of the best daily indicator) has turned and is looking south
- On Balance Volume banged against resistance last week and has continued the reversal.
- 1150 SPX resistance has proven too strong, AGAIN.
Why I’m torn and not just negative:
- Tuesday is POMO day from the FED. Could push the market up similar to what we saw on the last POMO day – Friday
- The low volume pullback today is actually healthy after a big move and could have just been a nice consolidation day ahead of the next leg up.
- Tomorrow’s Consumer Confidence number (52 estimate) could shape the direction, so we may have to toss out the technicals a little.
In a market drifting up but showing some negative divergence, I can’t be heavy long. Tomorrow will tell a lot.
