Pivotal Chart Pattern Day with Verdict after the close
For the S&P index the past two days have been setup days in its chart pattern.
Wednesday was an inside day, the high was lower than the high for Tuesday and the low was higher than the low for Tuesday, and the high was higher than the high for Tuesday, conclusion, a classic indecision day in a major uptrend.
Yesterday we saw the high higher than Wednesday’s high, the low lower than Wednesday’s low, and the close higher than close for Wednesday, a classic look at both sides of the market and a vote for continued higher markets.
Here are some of the possibilities for today:
Very Bullish: market opens higher, stays above yesterday’s lows, takes out all time highs and closes higher.
Bullish: market stays above yesterday’s lows, takes out yesteday’s highs and closes higher.
Neutral: Trades below yesterday’s lows, above yesterday’s highs and closes within yesterday’s range.
Bearish: market stays below yesterday’s highs, takes out yesteday’s lows and closes within yesterdays range.
Very Bearish: market stays below yesterday’s highs, takes out Wednesday’s lows, and closes below Wednesday’s lows.
Extremely Bearish: market takes out yesterdays highs and lows and closes below Wednesday’s lows.
Verdict after the Close: Very Neutral: market traded within prior days range. We will have to wait for next week’s action.
From a fundamental standpoint, The FED promise to stay accomodative until employment meets their criteria is the primary bullish factor. Weak earnings, especially from mainline retail, will however, keep pressure on the marktet. The disconnect between Wall Street and main street will continue to grow until China starts selling their U.S. Bonds.