Daily S&P Action
Last week, I thought that odds were beginning to favor a pullback in the stock market as represented by the S&Ps. On the daily chart, we saw demand tire out on February 17 (bar A). The next Monday on bar B, sellers took the market back to the close of Friday with a pickup in volume. Some selling had come in and indicated a pullback was likely.
We did pullback, but the reaction was more a sideways action than a pullback. On Thursday (bar C), the market fell in the morning, but rallied nicely in the afternoon and closed firm on its highs. The next day saw little follow through. This set up the potential for a sell off, and we did sell down this morning, but on relatively light volume. The market turned right around and ran back up above the overnight lows to rally higher into the close (bar D).
Weis Wave Shows Supply Weak; Buying Stronger
You can see on the Weis Wave that no significant supply has yet materialized. Buying continues to be stronger than the selling. We need to see a change of behavior that indicates sellers are coming into the market. The Weis Wave sill show this earliest and best. But so far, buyers remain in control and sellers are nowhere to be found.
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