Can we get out of this range $SPX 1102 –> 1116? [Chart]

 

Good morning.  We are nursing a 6 point SPX gap up this morning @ 7:20 am on what is a test the bulls day.  Today by the end of the day we should know what this market is made of.  Super bulls or situation normal. I will save the market comments for the charts section.  We have a lot of news and earnings to get through before we know exactly how we are going to open today.  New claims @ 10:30am.


Quote of the day:
Nothing can so alienate a voter from the political system as backing a winning candidate. – Mark B. Cohen

 

Chart

Score

 Day-1

Change

40 DPI

0

+2

-2

52 WNH

-4

0

-4

10 DHL

-2

0

-2

Total

-6

+2

-8

 

We lost breadth on all fronts and slid into the bear’s den with a consolidated –6 score.  I am going to give the bulls one more day to make new highs and restore the bullish score.

 

$SPX chart:

 

This is our SPX chart from the 7/20 pivot reversal where we made it up to 1120 on 7/27 and have spent the last two days consolidating that run.   I had set the trading range for the thrust consolidation at 1116  to 1102 and so far the price action has behaved.   I added an 1108 line this morning to act as intraday resistance/support.  We can use that line to judge a gap open on whether it is going to break to lows or not.

 

Based on my studies of the thrust/breadth data I would expect some correction to the upside from yesterdays’ selloff.  We should test that 1116 area today and even possibly break out to new highs above 1120.  The bulls need to move the ball along to have our thrusting signals (9:1 volume days and Zweig Breadth signals) validated.  A pullback from here and we would have to scale back our expectations which for me right now is that we could rally all the way to 1150 without a pullback more significant than this two day consolidation.

 

Bear victory today would be a break of 1102 area and bulls a break above 1116 until then we are in neutral.

 

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