Let's start with bullish items;
1) Today's internals were much stronger than it appeared on the face. IWM (the Russel 2000) was up 1.4% which is double the NAS and more than triple the S&P. Same for IYR (Dow Jones Real Estate), also up 1.4%. XLF even outperformed the S&P today, it was up .52%.
2) The daily stochs on the S&P are bottoming. This almost always results in a upswing in the market. It may be a temporary upswing that ends with another plunge, but I've never seen the daily stochs swing up and the market not go up at least some.
3) Friday and Tuesday are the last 2 trading days of the month. And then Wednesday/Thursday are the first 2 trading days of next month AND before and after a holiday. End of month/beginning of month always leans bullish and this is especially true before/after a holiday weekend.
o.k. so those are the bullish things and they make a pretty strong argument.
Bearish things...
1) Every sector that made a big move today stopped RIGHT ON resistance. And very important resistance at that.
*Disclosure here, I went short today by shorting TNA and going long DRV. I have pretty tight stops because we are literally sitting on resistance here. We either fail here or we take it out, in which case I quickly switch sides because we'll rocket ride most likely.
Here's the charts.. the speak for themselves;
IWM (Russel 2000).. stopped right at both a trendline and the 50DMA;
IYR (Dow Jones Real Estate).. Stopped right at a trendline and top of the bollinger bands;
XLF (Financials sector ETF).. Stopped right at the 200dma.
and the S&P 500.. stopped right under the bollingers and just under the 50dma that it bounced down off of intra-day;
So there you have it. Plenty of things for the bulls to feel good about today.. but man the market is sitting on some heavy resistance right here.
Put yer hard hats on, the next break one way or the other is probably going to be pretty violent.
GL
CJ
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