Given the gap open action in yesterday’s overnight market, we were looking for higher prices. Although the trade referred to in the last post worked OK, it did not produce a new leg up as expected. Instead, buying dried up on the highs, sellers stepped in aggressively, and we had a 40-point fall.
Supply has returned to the market. That being said, we have made seven consecutive days of lower closes and are pretty oversold. While there is nothing to say we can’t go lower, watch for signs of holding a higher low tomorrow (1275?) or a test of today’s low (1270.25). Any rally is likely to find difficulty in the 1290 – 1300 level, with 1310 a strong resistance area higher up. Support below today’s low comes in at the 1250 area.
Dr. Gary
Today (8/2) SPY reached March low with huge volume, we are deeply oversold. look like a sell climax. should we expect a bounce from here? or break the “ICE”?
if bounce, can we expect a “V” resversal like market did in March?
thanks
No doubt we are oversold and due for a pullback I don’t view this as a climax, however, and the odds of a V-Spike reversal are very low. I suspect we are in the early stages of a large move down. I’ll post more on this later.