Yesterday’s price action was almost a mirror image of Tuesday’s. Although it closed higher Tuesday is technically a “downtrending” day; and, while yesterday closed sharply lower it is technically an “uptrending” day! The determined selling brought the cash S&P500 back down to the weekly “support” line shown in bright green on the chart. Fail to hold the March low and we may quickly see the next support level at 1245-49.As we go into the holiday weekend I think that a bullish view is only warranted on a break above 1304.67 today (this is where today’s resistance line falls). Another negative or slightly bullish day today could cause the RSI index to become severely oversold – which is not bullish. More on this if conditions warrant.
What worries me is if we break the March low. My timing work; which I (on purpose) don’t write about much, will view such a break as a very negative event for the future of equity prices over the coming months.
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