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.



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