In yesterday’s post, I noted that although the market rallied strongly the day before, a pullback was likely. I said watch for a pullback into the 1405 – 1400 area. You can see that post by clicking here.
We did indeed have a pullback to 1405. You can see the pullback on the daily chart. Also, the S&Ps dipped underneath yesterday’s pullback low and then pushed back up above it in the overnight market. Is the market ready to rally? Well, maybe not. Note the character of that pullback. While the price didn’t fall very much, the Weis Wave volume on that pullback was a bit high. I labeled this wave as ‘A’ on the 27,000 Tick Chart. Hmmm … that makes today interesting!
That Weis Wave volume suggests some supply. So today may see a little more downside develop — perhaps as low as the 1400-1395 area, or just further sideways consolidation. The overnight trading range is fairly narrow, and that could continue through today.
What to Watch for Today
We had a little trading activity around the 1412-1413 area yesterday. Failure to rally above this area (short blue line on 27K Tick Chart) in the early morning session could set up another wave down. Obviously, failure to break and push down below the overnight low at 1414.75 or a spring of that level would say that supply had dried up and we could see the market drive higher.
Reading the Market like This
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