I am sure you will see about a hundred (or more) of these type of blog posts tonight but regardless of that, I will still do my best to cover the action the best I can. Here we go.
$SPY had a day to take notice. Nothing that will call a top to the rally but something that could stall it. With a day like this you do not know what we will come of it, we came out of the gate strong, went to all time highs and then sold off hard with massive volume. Not a bullish thing at all but as I said, not a bearish thing unless it leads to something thus ‘a day to take notice’. No, I would not be buying into a day like today, let’s see what this leads to, if nothing then we will have the chance to form some nice bases which will be nice because there is definitely a lack of bases today.
The base is at the base of all the technical analysis. Without a base breakout or breakdown there is likely not going to be a large move. We have not seen many strong bases lately. Some digestion would set up the charts better than you can ever imagine. Even just some sideways action before breaking higher would do wonders for a market like this. The major advantage of this is that we are able to see what it showing relative strength/weakness and what it is likely to LEAD the next rally.
Some individual names that we could talk about –
Apple closed alright today relative to $SPY but then again, this is just one day. From a macro POV it is still in a LARGE Downtrend. Not to be forgotten.
LinkedIn showed us some more weakness today, could be a decent (B+) short set up tomorrow if we trade and hold under today’s lows.
Banks could use some rest. As I said at the start of this article. the market could use some time off.
Gold could use some time to consolidate down here. Not quite comfortable yet shorting but watching very closely. Still a VERY broken pattern.
Bonds closed red today. Who cares why, they did. Along with everything else. We will see if they can ‘hold lower’. If so, then we SHORT.
A few charts for your pleasure –